What Happened?
Shares of local television broadcasting and media company Gray Television (NYSE: GTN) fell 4.4% in the morning session after the stock's negative momentum continued as the company reported third-quarter financial results that included a weak revenue forecast for the fourth quarter.
Although the company's revenue of $749 million and adjusted earnings per share of -$0.20 beat analyst estimates for the quarter, other details concerned investors. Revenue declined by 21.2% compared to the same period in the previous year, and the operating margin fell to 13.6% from 26.3%. More importantly, the company's revenue guidance for the fourth quarter was $774.5 million at the midpoint, which came in below analysts' expectations of $813.3 million. The combination of declining year-over-year results and a disappointing outlook for the next quarter led to the negative market reaction.
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What Is The Market Telling Us
Gray Television’s shares are extremely volatile and have had 43 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 6.8% on the news that the company reported third-quarter financial results that beat analyst expectations for profitability, even while sales declined year-over-year.
Gray Television posted revenue of $749 million, which met Wall Street's expectations. The company reported a GAAP loss of $0.24 per share, which was significantly smaller than the loss of $0.48 per share that analysts had anticipated. Additionally, its adjusted EBITDA, a key measure of cash flow, came in 16.7% ahead of estimates. However, the report was not entirely positive. Sales fell by 21.2% compared to the same period in the previous year. Furthermore, the company's revenue guidance for the next quarter came in nearly 5% below analysts' estimates. Despite these concerns, investors appeared to focus on the profitability beats, sending the shares higher.
Gray Television is up 38.1% since the beginning of the year, but at $4.63 per share, it is still trading 25.9% below its 52-week high of $6.24 from August 2025. Investors who bought $1,000 worth of Gray Television’s shares 5 years ago would now be looking at an investment worth $264.89.
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