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Townsquare Media Appears To Be Oversold

Dan Owens profile picture
Dan Owens


  • Radio advertising will be down in 2020, but by how much?
  • Townsquare Interactive is the wildcard for 2020.
  • Investors want clean balance sheets in uncertain times, and Townsquare has areas of concern.

Townsquare Media (NYSE:TSQ) has done a lot of things right since my previous article a year ago, yet the common stock has failed to pay off for investors.

Townsquare media 5 year stock price

To be fair, prior to the coronavirus impact on the overall stock market, the stock was up almost 100% since my previous article. Subsequently, it has dropped below the price of a year ago as investors weigh the impact of the economic slowdown.


Townsquare Media is centered on 321 radio stations serving 67 small and mid-sized markets, located in largely rural areas. The radio advertising business has historically been the lead earnings driver for Townsquare, supplemented by its digital marketing solutions and its live events segment.

Townsquare Media Revenue by Segment

Townsquare Interactive provides advertisers websites and services to complement its other radio and digital advertising purchased through Townsquare. These websites and services are targeted at small local businesses, at an average cost of $300 per month.

The live events segment is meant to further complement advertising, providing more local, live brand strengthening events for small businesses in the community.

2019 was one of the best years in company history. As noted in the fourth quarter conference call, the fourth quarter marked the eighth consecutive quarter of net revenue growth. Profit margins increased across operating segments (live events, interactive, radio advertising) on an ex-political basis. In reviewing the three segments in detail, let me attempt to come up with a fair value to help determine if a 50% discount in the stock price is warranted.

Radio advertising will be down in 2020, but by how much?

The radio business was healthy in 2019, even in a non-political year, showing continued growth. Radio advertising will be hit in 2020 by the coronavirus shutdown, and indeed CEO Wilson addressed that on the fourth quarter conference call on March 16th:

This article was written by

Dan Owens profile picture
Long time investor and financial software developer, modeling valuation based on fundamental and technical indicators.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in TSQ over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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