Nexstar shares tumble on massive $381M impairment charge, Q4 EPS miss
TV Food Network stake write-down drags quarterly results to loss despite revenue beat, 2026 guidance remains optimistic
Nexstar Media Group shares fell in extended trading Thursday after the broadcast television giant reported a shocking fourth-quarter loss, driven by a massive non-cash impairment charge on its stake in TV Food Network that overshadowed an otherwise solid revenue performance.
The Irving, Texas-based company posted earnings per share of negative $5.63, missing analyst expectations of $1.83 by a staggering $7.46 per share. The catastrophic miss was entirely attributable to a $381 million non-cash impairment charge on Nexstar's 31.3% ownership stake in TV Food Network, which the company said reflected deteriorating market conditions in the food media sector.
Despite the headline-grabbing loss, Nexstar's underlying business demonstrated resilience. Revenue climbed to $1.29 billion, beating the consensus estimate of $1.20 billion by 7.4% and showing that the company's core broadcasting operations continue to generate healthy top-line growth even amid challenging industry dynamics.
"Our core local broadcasting platform delivered solid revenue performance in the fourth quarter, reflecting the strength of our diversified revenue streams and our leading market positions across the country," the company said in its earnings release. "While the impairment charge significantly impacted our reported EPS, our operational performance remained on track."
The earnings report highlighted the stark reality of the post-election advertising landscape. Political advertising revenue, which had been a significant tailwind for broadcasters during the 2024 election cycle, collapsed by $233 million in the quarter as campaign spending evaporated following November's vote. This decline was widely anticipated by investors, as broadcast television companies typically experience a sharp drop in political ad spending in non-election years.
However, Nexstar offset much of this political advertising decline with strength in non-political categories. Non-political advertising revenue grew 4.5% year-over-year, demonstrating that core demand for local television advertising remains robust despite ongoing challenges from digital competition and shifting viewer habits.
Looking ahead, Nexstar provided 2026 adjusted EBITDA guidance of $1.95 billion to $2.05 billion, which represents solid growth from the $1.55 billion in EBITDA the company generated over the trailing twelve months. The guidance suggests management sees a path back to profitability despite the current headline challenges, and analysts noted that the company's first lien net leverage ratio of 1.71x provides comfortable financial flexibility to navigate the current environment.
"The 2026 EBITDA guidance provides some reassurance to investors that the impairment charge is largely a one-time event rather than indicative of fundamental operational deterioration," said analysts in a note following the earnings release. "The company's leverage position remains conservative, giving it optionality even if the advertising environment remains challenging."
The stark contrast between Nexstar's revenue beat and EPS miss underscores the complexity facing investors in the broadcast television sector. While the company's ability to grow core advertising revenue by 4.5% despite the loss of $233 million in political advertising demonstrates competitive strength, the TV Food Network impairment raises questions about the wisdom of Nexstar's diversification strategy beyond pure-play local broadcasting.
Nexstar currently trades at a trailing P/E ratio of 14.54, but the forward multiple drops to just 7.18 times earnings, reflecting analyst expectations for a rebound in 2026. The stock's 52-week range of $136.49 to $252.29 highlights the volatility that has characterized the company's shares over the past year, driven largely by the unpredictable swings in political advertising spending.
Analysts maintain a largely positive outlook on the shares, with six analysts rating the stock a buy or strong buy versus just two holds, according to recent data. The consensus target price of $233.62 sits just above Thursday's closing price of $232.54, suggesting limited upside potential in the near term but indicating that most analysts view the current weakness as a buying opportunity rather than the start of a more prolonged decline.
The earnings report also revealed that Nexstar's quarterly earnings growth declined 59.4% year-over-year, while quarterly revenue fell 12.3%, highlighting the ongoing challenges facing the traditional broadcast television model. However, the company's profit margin of 10.1% and operating margin of 15.2% remain healthy by industry standards, suggesting that Nexstar's cost structure provides some protection against further revenue pressure.
Investors will be watching closely for any additional management commentary on the TV Food Network impairment during the company's earnings call, including whether further write-downs could be forthcoming and what the company plans to do with the stake going forward. The $381 million charge represents a significant portion of the company's market capitalization of $7.06 billion, making the valuation of the TV Food Network asset a critical issue for shareholders.
As Nexstar navigates the post-election advertising environment and works to restore investor confidence following the impairment charge, the company's ability to continue growing non-political advertising revenue while maintaining financial discipline will be key determinants of whether the stock can regain momentum in 2026.