Investors Punish Entravision With Big Monday Sell-Off


Entravision Communications has emerged as a formidable Hispanic digital media company, given the revenue growth seen in this arm of the company in recent quarters.

But, the struggles at its radio and TV divisions, which still represent the core of Entravision’s business, could be worrying investors.

At the Closing Bell on Wall Street on Monday, EVC shares were off by 10.2%, closing at $4.65.

Volume was exceptionally high, at 1.31 million shares; average volume is 577,000 shares.

With a 1-year target estimate at $9, Entravision stock has suffered precipitously since Wednesday (3/14), when it finished at $6.30 — off from a recent $7 peak on Feb. 26.

The likely root of the steep sell off for Entravision can likely be pegged to the company’s Q4 results.

Entravision’s net income in Q4 climbed to $12.97 million (14 cents per diluted share), from $7 million (8 cents).

However, there is a blemish to the company’s Q4 results: consolidated adjusted EBITDA declined to $11.2 million, from $20.6 million, as Entravision’s free cash flow dipped to $5.9 million, from $14.9 million.

Digital growth is what’s exciting the company’s leadership. Radio and TV? Not so much.

The Q4 net revenue decrease in Entravision’s television segment was $7.3 million; it partially offset by an increase in retransmission consent revenue.

A net revenue decrease of $3.1 million was experienced in Q4 by Entravision’s radio segment.

Why? It is due primarily to decreases in both local and national advertising revenue, and a decrease in political advertising revenue.

Commenting on his company’s earnings results, Entravision Chairman/CEO Walter Ulloa said, “During the fourth quarter, we achieved revenue growth driven by increases in our digital media segment attributable to the acquisition of Headway. This growth in our digital media segment offsets decreases in both our television and radio segments, which were affected by decreases in local and national advertising revenue and the loss of political advertising revenue compared to 2016. We continued to build our digital footprint and, looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, and expanding our advertiser base to the benefit of our shareholders.”

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