Wedbush Comments On Entravision Communications Following Earnings Miss

Entravision Communications' EVC 4Q revenue and EBITDA missed as TV stations showed no core revenue growth. Revenue of $50.6m missed our $51.4m estimate, as advertising growth finished up below the high single-digit pacing given at the time of the November earnings call. TV revenue was $33.8m, below Wedbush's $34.3m estimate, and excluding retransmission revenue of $3.6m and ~50% of the political revenue of $2.8m, TV revenue would have been down ~4%. Wedbush maintains an Underperform rating and price target of $2.25. The price target is based on applying CBS's EV/EBITDA multiple, reflecting EVC's higher long-term growth profile in advertising, offset by EVC's lower growth potential from non-advertising revenue such as retransmission fees and TV syndication. Risks to attainment of the price target include: better-than-expected revenue growth or margin expansion, sensitivity of Spanish-language advertising to upcoming Census results, better-than-expected operating leverage, and leverage and deal trends. EVC is trading lower at $2.21