Friday, May 10, 2024
Saga Communications, Inc. is a broadcast company whose business is primarily devoted to acquiring, developing and operating radio stations. Saga currently owns or operates broadcast properties in 27 markets, including 79 FM and 33 AM radio stations. Saga’s strategy is to operate top billing radio stations in mid sized markets, defined as markets ranked (by market revenues) from 20 to 200. Saga’s radio stations employ a myriad of programming formats, including Active Rock, Adult Album Alternative, Adult Contemporary, Country, Classic Country, Classic Hits, Classic Rock, Contemporary Hits Radio, News/Talk, Oldies and Urban Contemporary. In operating its stations, Saga concentrates on the development of strong decentralized local management, which is responsible for the day-to-day operations of the stations in their market area and is compensated based on their financial performance as well as other performance factors that are deemed to effect the long-term ability of the stations to achieve financial objectives. Saga began operations in 1986 and became a publicly traded company in December 1992. The stock trades on NASDAQ under the ticker symbol “SGA”.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Q1 results. The company reported Q1 revenue of $24.7 million, marginally beating our estimate of $24.3 million. Adj. EBITDA in the quarter was $0.2 million, which missed our estimate of $1.7 million. The “miss” was due to extra ordinary expenses including streaming costs, healthcare, wages, and bad debt. Some of these costs are not expected to continue into subsequent quarters.
2024 outlook. We view 2024 as a year of transition for the company, given its increased focus and investment in growing digital and national revenue. Notably, management highlighted that its online news service is expected to have 18 different websites operational by the end of June, and its acquisition of five radio stations located in Lafayette, Indiana is expected to close by June 1.
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