Daily Stock Market Reports

Is Townsquare Media (NYSE:TSQ) a Good Stock to Buy?


If penny stocks attract you, then TipRanks’ penny stock screener is a handy tool to find future winners. Leveraging the screener, we came across Townsquare Media (NYSE:TSQ) stock. This penny stock has an Outperform Smart Score rating on TipRanks. Moreover, it has significant upside potential (based on analysts’ average price target), making it an attractive investment for the long term. 

Here’s Why Townsquare Media Stock is Attractive

Townsquare Media offers digital media and marketing solutions with its leading local radio station. Over the years, Townsquare has grown significantly thanks to digital transformation. 

Its radio stations have grown from 60 in 2010 to 357 in 2022. Meanwhile, average monthly website visitors have jumped over 50 times in the past decade. 

Through its digital-first strategy, TSQ generates 50% of its sales and earnings from recurring subscriptions for digital marketing and advertising solutions. It is worth mentioning that TSQ’s digital revenues have grown at a CAGR of 18% since 2016. 

Further, management is upbeat and expects the segment to grow at a CAGR of 11.5% through 2024.

Highlighting TSQ’s solid digital assets, Barrington analyst James Goss said that the company’s digital business now accounts for half of its revenues, “providing important diversification while complementing Townsquare’s quality radio operations.” 

Goss, who recommends a Buy on TSQ stock, added, “Improvement of financial leverage metrics is the top priority, targeting a year-end debt to EBITDA of under 4x from the current 4.65x. However, with the stock trading at a significant discount to management’s perceived value, we would not discount the possibility of some opportunistic share buybacks.” 

Is TSQ Stock a Buy?

While TSQ’s growing digital revenues and management’s focus on reducing net leverage are positives, advertising revenues could continue to face headwinds amid an uncertain macro environment. 

Townsquare Media stock commands a Moderate Buy consensus rating on TipRanks based on two Buy recommendations. Further, TSQ’s average price target of $24 implies 219.2% upside potential. 

TipRanks’ data shows that hedge funds bought 18.4K TSQ stock last quarter. However, 8.4% of investors have reduced their exposure to Townsquare Media stock in one month. 

TSQ stock has an Outperform Smart Score of eight out of 10.

However, before betting on penny stocks, it is prudent to know more about them. Start your research journey here: Are Penny Stocks a Good Investment? 

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