Townsquare Media (TSQ) – Takes A Big Step To Return Capital To Shareholders

Media and Entertainment
0 min read

Friday, March 10, 2023

Townsquare is a community-focused digital media and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 26,800 SMBs; a robust digital advertising division, Townsquare IGNITE, a powerful combination of a) an owned and operated portfolio of more than 330 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data, and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 321 local terrestrial radio stations in 67 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as,, and and premier national music brands such as,, and

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strong Q4 results. The company reported Q4 revenue of $120.3 million, an increase of 8.8% from the prior year period, beating our estimate of $118.1 million by 1.8%. Adj. EBITDA of $28.4 million grew by 11% from the same period last year and beat our estimate of $28 million by 1.4%. Digital advertising grew $5.2 million to $36.8 million, up 16.3% from the prior year period.

Soft start to the year. Management guided Q1 revenue to be flat to modestly higher from the year earlier in the range of $100 million to $102 million. Adj. EBITDA to be down yoy in the range of $17.5 million to $18.5 million. National advertising is pacing down 30% in Q1, a decline of $3 million from prior year quarter, with sports accounting for 66%. Its Interactive business has softened and is pacing flat revenues in Q1, while digital advertising is pacing up 12% to 14%.

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