Here is What to Know Beyond Why Gray Television, Inc. (GTN) is a Trending Stock

Gray Television (GTN) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Shares of this broadcast television company have returned +16.5% over the past month versus the Zacks S&P 500 composite's +4.5% change. The Zacks Broadcast Radio and Television industry, to which Gray Television belongs, has gained 8.4% over this period. Now the key question is: Where could the stock be headed in the near term?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.For the current quarter, Gray Television is expected to post earnings of $0.94 per share, indicating a change of +264.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.The consensus earnings estimate of $4.37 for the current fiscal year indicates a year-over-year change of +414.4%. This estimate has remained unchanged over the last 30 days.For the next fiscal year, the consensus earnings estimate of -$0.64 indicates a change of -114.5% from what Gray Television is expected to report a year ago. Over the past month, the estimate has remained unchanged.Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Gray Television is rated Zacks Rank #3 (Hold).The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.In the case of Gray Television, the consensus sales estimate of $966 million for the current quarter points to a year-over-year change of +20.3%. The $3.87 billion and $3.3 billion estimates for the current and next fiscal years indicate changes of +17.9% and -14.7%, respectively.Last Reported Results and Surprise HistoryGray Television reported revenues of $826 million in the last reported quarter, representing a year-over-year change of +1.6%. EPS of $0.09 for the same period compares with -$0.10 a year ago.Compared to the Zacks Consensus Estimate of $834 million, the reported revenues represent a surprise of -0.96%. The EPS surprise was -10%.Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates three times over this period.ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Gray Television is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Gray Television. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gray Television, Inc. (GTN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks