Nexstar Media Group, Inc. (NXST): A Bull Case Theory

We came across a bullish thesis on Nexstar Media Group, Inc. on Accrued Interest’s Substack by Simeon McMillan. In this article, we will summarize the bulls’ thesis on NXST. Nexstar Media Group, Inc.'s share was trading at $207.73 as of August 19^th. NXST’s trailing and forward P/E were 10.86 and 15.11 respectively according to Yahoo Finance.

Nexstar Media Group’s ($NXST) announced acquisition of Tegna ($TGNA) represents a landmark deal in the broadcast television sector, but the transaction raises important strategic and financial questions. The company opted for an all-cash offer rather than a stock component, a choice that heavily increases leverage in the short term and delays deleveraging to 3x until 2028. While management highlights synergies of $300 million, representing roughly 37% of Tegna’s EBITDA, skeptics question whether such efficiencies can offset the structural decline of broadcast TV viewership.

The strategic rationale emphasizes scale, broader geographic reach, and competitive positioning against Big Tech and Big Media, but in reality advertisers can already target audiences nationally via digital platforms such as Google and Meta, undermining the incremental value of larger coverage maps. Management has drawn parallels to its Tribune Media acquisition, pointing to proven cost synergies, but the combined Nexstar/Tribune entity has underperformed the broader market since 2019, highlighting the industry’s growth limitations. With the Tegna deal, investors must weigh the risk of heightened leverage against the promise of near-term earnings accretion.

Equity holders face years of patience while Nexstar manages debt in a declining industry, while Tegna shareholders, by contrast, receive the certainty of an all-cash payout. For long-term investors, the lack of organic growth, reliance on financial engineering, and shrinking broadcast audience base raise concerns about sustainability. The deal may extend Nexstar’s runway through cost cuts, but without meaningful revenue growth, its upside remains constrained. For Tegna shareholders, however, the cash exit represents an attractive outcome.

Previously, we covered a bullish thesis on Nexstar Media Group, Inc. (NXST) by Value Don’t Lie in April 2025, which highlighted the company’s strong free cash flow, capital returns, and regulatory-driven M&A optionality. The company’s stock price has appreciated approximately 16% since our coverage. This is because investor confidence in buybacks played out. The thesis still stands as FCF resilience remains intact. Simeon McMillan shares a similar but emphasizes on leverage risks and execution challenges from the Tegna deal.

Nexstar Media Group, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held NXST at the end of the first quarter which was 31 in the previous quarter. While we acknowledge the potential of NXST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.