3 Broadcast Radio & TV Stocks to Buy From a Prospering Industry

The Zacks Broadcast Radio and Television industry has been benefiting from a massive spike in digital content consumption. Companies, including Fox FOXA, Sirius XM SIRI and AMC Networks AMCX, are thriving due to their diverse content offerings, which include original, regional and short-form content tailored for small screens like smartphones and tablets. Improved Internet speed and penetration, coupled with technological advancements, have been advantageous for industry participants. As monetization and revenues from advertising spending continue to be modest, strategies focused on profit protection, cash management and greater technology integration have gained significance and are expected to aid these companies in driving top-line growth in the near term. However, the industry is grappling with an escalation in cord-cutting despite a surge in demand for streaming content.

Industry Description

The Zacks Broadcast Radio and Television industry encompasses companies that provide entertainment, sports, news, non-fiction and musical content across television, radio and digital media platforms. These entities generate revenues through the sale of television and radio programs, advertising slots and subscriptions. With technological advancements and a growing demand for virtual reality and Internet radio, industry players are increasing their investments in research and development, as well as sales and marketing efforts, to remain competitive. The industry's focus is likely to shift toward sustaining current levels of operations, coupled with a renewed emphasis on flexibility. This approach would accelerate the transition to a variable cost model, thereby reducing fixed costs and enhancing agility in the face of evolving market dynamics.

4 Broadcast Radio and Television Industry Trends to Watch

Shift in Consumer Preference a Key Catalyst: To adapt to the evolving landscape, companies are diversifying their content offerings for over-the-top (OTT) services alongside traditional linear TV. The availability of streaming services across a wide range of platforms has enabled them to reach a global audience, expand their international user base and attract advertisers to their platforms, thereby boosting ad revenues. The utilization of services that aid advertisers in measuring their return on investment and enhancing use cases is expected to benefit industry participants. Major leagues and events, such as the NFL, NHL, Olympics, European Games, EPL and elections, also contribute significantly to ad revenue generation.

Increased Digital Viewing Fuels Content Demand: Many industry participants, either launching their own OTT services or acquiring existing ones, leverage user insights to deliver tailored content. The surge in digital viewing has made consumer data readily available, allowing companies to apply artificial intelligence (AI) and machine learning techniques to create or procure targeted content. This approach not only boosts user engagement but also enables industry players to raise the prices of their services at opportune moments without the fear of losing subscribers.

Uncertain Macroeconomic Landscape Impedes Production and Ad Demand: Advertising is a significant revenue source for the Broadcast Radio and Television industry. However, industry participants are grappling with the effects of persistently high inflation, rising interest rates, increased capital costs, a soaring U.S. dollar and the looming threat of a recession. These factors have prompted advertisers to trim their ad budgets, which is expected to impact the top-line growth of industry players in the near term. Moreover, intense competition for ad dollars from tech and social media companies has been a significant impediment to the growth of industry participants.

Low-Priced Skinny Bundles Impact Revenues: The surge in cord-cutting has compelled industry participants to offer "skinny bundles." These Internet-based services often contain fewer channels than traditional subscriptions and are, therefore, more affordable. This move aligns with changing consumer viewing dynamics, as growth in Internet penetration and advancements in mobile, video and wireless technologies have boosted small-screen viewing. While these alternative services are expected to keep users engaged with their platforms, increasing the need for additional content, the low-priced skinny bundles are likely to dampen the top-line performance of industry players.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Broadcast Radio and Television industry is housed within the broader Zacks Consumer Discretionary sector. It currently carries a Zacks Industry Rank #38, which places it in the top 16% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates dismal near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the top 50% of the Zacks-ranked industries results from a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Oct. 31, 2024, the industry’s earnings estimates for 2025 have moved north by 6.6%.

Before we present some stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Beats Sector, S&P 500

The Zacks Broadcast Radio and Television industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 Index in the past year.

The industry has returned 57.6% over this period compared with the S&P 500’s growth of 18.3% and the broader sector’s appreciation of 15.7%.

One-Year Price Performance

Industry's Current Valuation

On the basis of trailing 12-month Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA), which is a commonly used multiple for valuing Broadcast Radio and Television stocks, the industry is currently trading at 12.59X versus the S&P 500’s 18.69X and the sector’s 11.29X.

In the past five years, the industry has traded as high as 21.53X and as low as 4.72X, recording a median of 10.73X, as the chart below shows.

EV/EBITDA Ratio (TTM)

3 Broadcast Radio and Television Stocks to Buy

AMC Networks: This Zacks Rank #1 (Strong Buy) company presents a compelling turnaround opportunity as the company strategically pivots from traditional cable to streaming dominance. The stock has recently shown strong momentum, trading at compelling valuations that suggest significant upside potential for investors willing to capitalize on current market conditions. The company's strategic focus on premium content, including successful franchises like The Walking Dead universe and targeted streaming initiatives through AMC+, positions it well for sustained revenue growth. 

Management's disciplined approach to cost optimization has improved operating margins while maintaining content quality, creating a leaner, more efficient organization. The network's loyal subscriber base and proven ability to generate high-quality original programming provide stable cash flows that support shareholder value creation. With streaming revenues accelerating and the company successfully balancing traditional cable operations with digital transformation, AMC Networks offers investors an excellent entry point to participate in the media sector's ongoing evolution. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for 2025 earnings has increased 7.1% to $2.25 per share in the past 60 days. AMCX shares have declined 20.3% year to date.

Price and Consensus: AMC

Fox Corporation: This Zacks Rank #2 (Buy) company presents a buy opportunity for near-term investors, demonstrating robust fundamentals that underscore its market resilience. The company has shown impressive revenue growth, driven by its dominant sports broadcasting portfolio, including NFL and college football rights that consistently deliver premium advertising rates and viewer engagement. Fox's strategic focus on live news and sports programming provides a sustainable competitive advantage in an increasingly fragmented media landscape, insulating it from streaming-induced cord-cutting pressures that plague traditional entertainment-focused broadcasters. 

The company's strong free cash flow generation supports its shareholder-friendly capital allocation strategy, including meaningful dividend payments and share buybacks that enhance investor returns. With a relatively attractive valuation compared to media peers and management's disciplined approach to content investment, Fox Corporation stands well-positioned to capitalize on the enduring appeal of live programming.

The Zacks Consensus Estimate for fiscal 2026 earnings has moved north by 1.7% to $4.20 per share in the past 30 days. FOXA shares have returned 21.2% year to date.

Price and Consensus: FOXA

SiriusXM Holdings: This Zacks Rank #2 company stands out as an attractive investment opportunity following its recent operational momentum and favorable valuation metrics. The satellite radio leader has demonstrated resilience through its subscription-based business model, generating consistent cash flows that support its generous dividend yield and ongoing share repurchase program. Recent quarterly results have shown the company successfully navigating the evolving audio entertainment landscape while maintaining robust ARPU growth and subscriber retention rates. Trading at a notably discounted valuation compared to its media peers, SIRI offers investors an appealing entry point with significant upside potential.

The company's strategic initiatives, including platform enhancements and content diversification, position it well to capitalize on the connected vehicle market expansion. Combined with its strong free cash flow generation and commitment to returning capital to shareholders, SiriusXM presents a compelling risk-reward profile that warrants immediate consideration for value-oriented investors seeking near-term appreciation potential.

The Zacks Consensus Estimate for 2025 earnings has remained steady at $2.71 per share in the past 60 days. In the year-to-date period, SIRI shares have declined 2.9%.

Price and Consensus: SIRI

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This article originally published on Zacks Investment Research (zacks.com).

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