What Happened?

Shares of global media and entertainment company iHeartMedia (NASDAQ:IHRT) jumped 41.1% in the morning session after 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.

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What The Market Is Telling Us

iHeartMedia’s shares are extremely volatile and have had 99 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 6 months ago when the stock dropped 30.2% on the news that the company reported weak first-quarter results. Its operating margin missed and its revenue fell short of Wall Street's estimates. Sales declined by $12.2 million (-1.5% y/y) due to a decrease in broadcast advertising given uncertain market conditions. Free cash flow also turned negative. On top of that, next quarter's revenue guidance fell short. Overall, this was a bad quarter for iHeartMedia.

iHeartMedia is down 12.6% since the beginning of the year, and at $2.15 per share, it is trading 28.8% below its 52-week high of $3.02 from December 2023. Investors who bought $1,000 worth of iHeartMedia’s shares 5 years ago would now be looking at an investment worth $145.27.

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