Guggenheim cuts iHeartMedia stock target to $4.50, keeps buy rating

On Monday, Guggenheim analysts adjusted their financial outlook for iHeartMedia (NASDAQ:IHRT), reducing the price target to $4.50 from the previous $5.00, while still maintaining a Buy rating on the company’s shares. Currently trading at $1.83, InvestingPro analysis indicates the stock is undervalued, despite showing a 14.4% gain over the past week. The adjustment follows iHeartMedia’s fourth-quarter earnings report for 2024 and the company’s guidance for the first quarter of 2025.

iHeartMedia reported fourth-quarter 2024 revenue of $1.118 billion, marking a 4.8% increase, which was slightly below the company’s own mid-to-high single-digit growth expectations. The adjusted EBITDA for the same period was $246 million, falling short of the anticipated ~$290 million. According to InvestingPro data, the company operates with a significant debt burden of $5.86 billion and maintains a weak overall financial health score. These figures compared less favorably to Guggenheim’s forecasts, which had predicted even higher revenues of $1.163 billion and an adjusted EBITDA of $293 million.

Looking ahead to the first quarter of 2025, iHeartMedia has provided guidance indicating an expected revenue decline in the low-single digits, with Guggenheim’s own estimate aligning at a 1% decrease. The company also projected its adjusted EBITDA to be in the range of $100 million to $110 million for the upcoming quarter, with Guggenheim’s projection set at $106 million. InvestingPro subscribers have access to 8 additional key insights about iHeartMedia’s financial outlook and market position through exclusive ProTips.

Despite the lower than expected fourth-quarter performance and the cautious outlook for the start of 2025, iHeartMedia reiterated its adjusted EBITDA guidance for the full year of 2025 at approximately $770 million, a figure with which Guggenheim’s estimates concur. Additionally, the company anticipates that its full-year revenue will be roughly flat.

The revised price target of $4.50 reflects the analyst’s updated assessment in light of iHeartMedia’s recent earnings report and forward-looking guidance.

In other recent news, iHeartMedia reported a 4.8% increase in its Q4 2024 consolidated revenues, reaching $1.12 billion, although this figure fell short of the anticipated $1.17 billion. The company’s adjusted EBITDA rose by 18.2% to $246 million, showcasing operational efficiency. Despite the revenue growth, iHeartMedia’s future guidance predicts flat revenue growth for 2025, which has stirred some investor caution. The company achieved its lowest net debt position, enhancing financial stability. Additionally, iHeartMedia announced the resignation of Jordan R. Fasbender, Executive Vice President, Chief Legal Officer, and Secretary, effective April 2025. The company has begun the search for her successor to ensure a seamless leadership transition. These developments come amid a dynamic media landscape, with iHeartMedia maintaining a strong presence in digital and podcast revenues. The company’s podcasting segment continues to grow, with revenues rising by 6% year-over-year, further strengthening its position as a leading podcast publisher in the U.S.

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