Šeštadienis, 20 liepos, 2024
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Gannett Co. Inc. Stock Analysis

The company Gannett Co., Inc. is one of the leading media and marketing companies in the USA and the United Kingdom. It operates 92 strong brands in the USA with its primary brand being USA Today. In the United Kingdom, it operates over 160 online local news brands.

The company provides news through digital, mobile, and print products. It publishes 261 daily editions, 302 weekly editions, and has 383 local websites, with 176,000,000 unique online visitors per month. USA Today has a daily circulation of 4,000,000. 80% of its newspapers have been published for more than 100 years.

Company’s history

The company was founded by Frank Gannett in 1906. On August 5, 2014, the company decided to split into two publicly traded companies. One company, TEGNA, specializes in broadcasting and digital media. The other company, Gannett, specializes in publishing and related digital business.

The separation took place on June 29, 2015. Since then, the company has been referred to as the „New Gannett.” The purpose of the separation was to manage brands more effectively, position finances and strategy more clearly, and provide more value to shareholders.

Under the terms of the separation, Gannett shareholders as of June 22, 2015, became TEGNA shareholders and received one New Gannett share for every two TEGNA shares they held.

On November 19, 2019, the company was acquired through a merger by the media company New Media. Gannett shareholders received $6.25 in cash per share and 0.5427 New Media shares for each Gannett share. After the merger, the name Gannett and the stock ticker GCI remained due to market recognition.

Distribution of Company Revenue by Segments:

Gannett Revenue by Segments
Revenue by Segments

Gannett Co. Financials

So far, the separation of companies for efficiency does not appear to have been justified. In 2023, the company’s revenue decreased by -9.57%, and it incurred losses. The average annual revenue decline over a 9-year period was -1.92%. The company operated at a loss for 5 consecutive years.

The Gross profit is evidently too low for the company to operate profitably. Even with a 42% Gross margin, the company incurred losses. In 2023, the Gross margin was 26.50%. We see that more than 75% of the Gross profit goes to General and Administrative expenses, which is very high in this context.

The company’s finances are managed with a corresponding level of risk. Total liabilities amount to as much as 586.50% of Equity. Although the debt burden is being slowly reduced, the interest on financial debts amounts to 130% of Operating profit. How can there be profits when costs are so high?

The Cash flows from main operations are on a downward trend. Net cash flows and FCF are also decreasing. Cash in the account is dwindling, working capital is negative, and the average 9-year ROAE is negative. I don’t know if it’s still worth analyzing this company?

However, the F_Score indicator is investment-grade at 6. It is possible that the company might gradually manage to climb out of the hole.

Investment Scoreboard:

GCI Investment Scoreboard
Investment Scoreboard

Gannett Co. Inc. Stocks

The company’s shares are listed on the NYSEE exchange. The ticker symbol is GCI.

The stock price’s Standard deviation was as high as 97%, with a beta of 2.44. This makes the stock very risky and well-suited for traders, but not for investors. Especially since the stock’s equity risk premium is -15%, and the average annual price decline over a 9-year period was -23.46%.

It is clear that we cannot assess the stock’s price prospects. But we can look at what other analysts suggest.

Assessments and forecasts of third countries

Artificial Intelligence:

An analysis of Gannett’s business performance, based on the 2023 annual results, reveals several important aspects:

  • Total digital revenue amounted to $277.1 million, or 41.4% of total revenue, which is a 2.9% increase from the previous year.
  • Revenue from digital subscriptions alone grew by 18.1%, exceeding $150 million.
  • The average revenue per user for digital subscriptions increased by 19.5% to $7.05.
  • The number of digital subscriptions reached approximately 2.0 million, a 1.6% growth.
  • Revenue from digital media grew by 3.9%, totaling $78.8 million.
  • Revenue from the main platforms of digital marketing solutions slightly decreased by 0.3%, amounting to $119.4 million.

Company CEO Michael Reed emphasized that 2023 saw growth in EBITDA and free cash flow, marking a significant turnaround compared to the previous year’s downturn. The company’s debt was also reduced with $140 million in debt repayments.

Regarding stock price forecasts, analysts suggest that Gannett’s stock price could average $4.30 over the next twelve months, with a maximum forecast of $5.00 and a minimum of $3.60. This forecast reflects a potential 14.51% increase from the current stock price.

Considering this data, it can be stated that Gannett’s business performance shows a positive trend, especially in the area of digital transformation, which could influence future stock price growth.

Tradingview consensus:

GCI Tradingview consensus
Tradingview consensus

Investing.com consensus:

GCI Investing.com consensus
Investing.com consensus

Stock Analysis consensus:

Gannett Co. Stock Analysis consensus
Stock Analysis consensus

Stocktwits consensus:

GCI Stocktwits consensus
Stocktwits consensus

Price chart

Conclusions

It’s impossible to invest in this company’s stocks despite some analysts’ optimism. We don’t buy someone’s imagination. We conduct our own analysis and have a very specific result – Don’t Buy. We’re waiting for the company to show results of such activity that will finally interest us.

A cup of coffee from you for this excellent analysis.

Company’s site

More US stocks.

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