Nexstar Media Group stock is kind of a weird beast. If you follow the broad market, you’ve probably heard people say that linear TV is dead. They’ll point to cord-cutting, Netflix, and the "death of the bundle" as reasons to run far away from anything involving a broadcast tower. Honestly, on paper, that makes total sense. But then you look at Nexstar Media Group (NXST) and the math starts doing something very different.
While the S&P 500 is off chasing AI hype, Nexstar has quietly become the largest local television station operator in the United States. They aren't just a "TV company" anymore; they are a massive cash-flow machine that currently reaches about 220 million people. As of January 2026, the stock is trading around $206.32, and the conversation around it has shifted from "will they survive?" to "how much can they buy?"
The TEGNA Factor: A 2026 Game Changer
The big elephant in the room right now is the potential acquisition of TEGNA. If you’ve been watching the headlines, Nexstar has been pushing hard for FCC approval to swallow up this rival. Benchmark recently named Nexstar its "Top Idea for 2026," specifically because of the value this deal could unlock.
Think about it. If the merger goes through, Nexstar’s footprint would expand to 259 stations across 133 markets. We are talking about reaching 80% of U.S. households.
Analyst Daniel Kurnos from Benchmark has been pretty vocal about this. He suggests that if the TEGNA deal closes, we could see the stock price start with a "3" instead of a "2." Basically, $300+ territory. Even if the regulators get grumpy and the deal falls through, the company still has a floor. Without TEGNA, many analysts believe the standalone value is at least $180, which provides a nice bit of "margin of safety" for anyone worried about a total collapse.
Why the Dividend is Actually Sustainable
Most people get spooked by high-yield stocks in declining industries. They think it's a "yield trap." Nexstar currently offers a forward dividend yield of roughly 3.61%, paying out $7.44 per share annually.
Here is the thing: they have raised that dividend for 13 consecutive years.
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- Payout Ratio: It’s hovering around 42-45%. That means they aren't even using half of their earnings to pay you.
- Free Cash Flow: This is the metric that actually matters. Nexstar’s free cash flow yield is a staggering 16%.
- The Cycle: Because 2026 is an election year, political ad spending is expected to be a massive tailwind.
Local TV stations are basically the primary beneficiaries of political mudslinging. When candidates want to reach swing voters in Pennsylvania or Arizona, they don't just buy TikTok ads; they buy the local evening news. Nexstar owns those slots.
nexstar media group stock and the CW Pivot
One of the weirdest moves Nexstar made recently was buying a 75% stake in The CW. For years, The CW was where you went for teen vampires and superheroes—and it lost a ton of money. Nexstar basically said, "We can fix that."
They’ve completely gutted the old strategy. They swapped expensive scripted dramas for cheaper, high-impact content like live sports. We’re talking NASCAR Xfinity Series, WWE NXT, and college football. It’s working. Viewership for NASCAR on The CW was up 19% in early 2025.
Nexstar’s leadership, including President Mike Biard, has guided for The CW to finally hit profitability in 2026. If they actually pull that off, it removes a massive drag on the company’s bottom line. It turns a money pit into a contributor.
The Risks Nobody Should Ignore
It’s not all sunshine and rainbows. Linear TV is shrinking. Distribution revenue, which is what Nexstar gets from cable and satellite providers, was essentially flat in 2025. People are canceling cable. That's a fact.
Nexstar is fighting this by raising the rates they charge those providers (retransmission fees), but there’s a limit to how much they can squeeze. Also, they are carrying a lot of debt—about $6.4 billion. While they have been aggressive about paying it down and repurchasing shares, high interest rates make that debt more expensive to service.
Then there is the regulatory risk. The Trump administration has signaled some openness to deregulation, but it's never a sure thing. If the FCC decides Nexstar is getting too big and blocks the TEGNA merger, the stock might see a short-term dip as the "merger premium" evaporates.
What the Numbers Tell Us
If you look at the 2025 Q3 results, the company missed earnings per share (EPS) estimates, coming in at $2.14 versus the expected $2.54. Revenue was $1.2 billion. The stock took a 5.8% hit on that news.
But investors who panicked might have missed the forest for the trees. The "miss" was largely due to a massive $145 million drop in year-over-year political advertising. Remember: 2024 was a massive election year, 2025 was an "off" year. 2026 is where the political money comes roaring back.
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Analysts are forecasting:
- Earnings Growth: Expected to grow at about 10-12% per year.
- Revenue: Likely to remain flat or slightly decline (-0.2%) as the industry shifts.
- Return on Equity: Forecasted to be a very healthy 26.3% by 2028.
Actionable Insights for Investors
If you are looking at Nexstar Media Group stock right now, you have to decide if you believe in the "last man standing" theory. Nexstar is positioned to be the dominant player in an industry that is consolidating.
- Watch the FCC: Any news regarding the TEGNA acquisition or changes to local ownership caps will move this stock 10% in either direction.
- Check the CW: Keep an eye on the quarterly reports for The CW. If they hit profitability ahead of schedule, the market will likely re-rate the stock.
- Mind the Cycle: 2026 is a "harvest" year for broadcasters. Expect massive revenue spikes in Q3 and Q4 due to mid-term election spending.
- Income Play: If you want a 3.6% yield that grows every year, this is one of the more reliable "old media" names to consider.
Basically, Nexstar is a play on consolidation and political spending. It isn't a high-growth tech stock. It’s a cash-flow play that relies on the fact that, for all our talk about Netflix, millions of people still turn on the local news every single night.
Next Steps for You: Review your exposure to the communication services sector. If you’re heavy on growth but light on value and dividends, look at the upcoming Q4 2025 earnings call scheduled for February 26, 2026. This will be the first clear indicator of how the company plans to guide for the pivotal 2026 political cycle and whether the TEGNA deal is gaining traction with regulators.