Wednesday, August 03, 2022
Townsquare Media (TSQ)
The Undervalued Industry Standard Bearer
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 WYRK.com, WJON.com, and NJ101.5.com and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com.
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 Q2 results. The company reported record quarterly revenue of $121.9 million, 3.6% higher than our estimate of $117.7 million. Adj. EBITDA of $32.4 million compared favorably to our estimate of $32.2 million. The quarter demonstrated the resiliency of local advertising and the success of Townsquare’s digital businesses.
Holding up to economic headwinds. Broadcast advertising revenue of $56.9 million was slightly up from $56.4 million in the prior year period. The continued steady Broadcast revenue is attributable to the company’s local market focus. While national advertising was down double-digits, it only accounts for roughly 7% of the company’s revenue. Management noted that local advertising, a more meaningful component of the business, continues to pace up.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.