What Happened?
Shares of global media and entertainment company iHeartMedia (NASDAQ:IHRT) fell 25.8% in the afternoon session after the company reported weak fourth quarter 2024 results: its Digital Audio revenue missed and its revenue fell short of Wall Street's estimates. On the other hand, iHeartMedia provided optimistic revenue guidance for next quarter, which blew past analysts' expectations. Its full-year EBITDA guidance also slightly exceeded Wall Street's estimates. Though first-quarter revenue is expected to decline in the low single digits, management remains confident in achieving long-term cost savings of $150 million following its debt restructuring efforts, and this is supporting the stron profit guidance. Overall, this was a weaker quarter, with the revenue shortfall weighing on results, even as the company's improved cost structure provides some optimism for the future.
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What The Market Is Telling Us
iHeartMedia’s shares are extremely volatile and have had 89 moves greater than 5% over the last year. But moves this big are rare even for iHeartMedia and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 41.1% on the news that the company reported strong third quarter earnings that blew past analysts' EPS expectations. In addition, its revenue narrowly outperformed Wall Street's estimates.
On the other hand, its EBITDA forecast for next quarter was underwhelming and its EBITDA guidance for the full year fell short of Wall Street's estimates. Overall, this was a mixed quarter.
iHeartMedia is down 18.8% since the beginning of the year, and at $1.64 per share, it is trading 40.8% below its 52-week high of $2.77 from February 2024. Investors who bought $1,000 worth of iHeartMedia’s shares 5 years ago would now be looking at an investment worth $108.54.
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