Gray Television’s (NYSE:GTN) Q1 Sales Top Estimates

Local television broadcasting and media company Gray Television (NYSE: GTN) reported Q1 CY2025 results topping the market’s revenue expectations, but sales fell by 5% year on year to $782 million. Its GAAP loss of $0.23 per share was 52.6% above analysts’ consensus estimates.

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Company Overview

Specializing in local media coverage, Gray Television (NYSE: GTN) is a broadcast company supplying digital media to various markets in the United States.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Gray Television grew its sales at a 11% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Gray Television’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Retransmission and Advertising, which are 48.5% and 44% of revenue. Over the last two years, Gray Television’s Retransmission (affiliate and licensing fees) and Advertising (marketing services) revenues were flat.

This quarter, Gray Television’s revenue fell by 5% year on year to $782 million but beat Wall Street’s estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to decline by 10.9% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

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Operating Margin

Gray Television’s operating margin has risen over the last 12 months and averaged 18.2% over the last two years. On top of that, its profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.

In Q1, Gray Television generated an operating profit margin of 11.8%, down 3.3 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Gray Television’s EPS grew at an unimpressive 3.1% compounded annual growth rate over the last five years, lower than its 11% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

In Q1, Gray Television reported EPS at negative $0.23, down from $0.79 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Gray Television to perform poorly. Analysts forecast its full-year EPS of $2.31 will invert to negative negative $0.63.

Key Takeaways from Gray Television’s Q1 Results

We were impressed by how significantly Gray Television blew past analysts’ EPS expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. On the other hand, its Retransmission revenue missed. Zooming out, we think this was a mixed print. Investors were likely hoping for more, and shares traded down 1.2% to $3.67 immediately after reporting.

Is Gray Television an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.