- iHeartMedia is leveraged but should show strong free cash flow growth next 5 years

- Biggest radio broadcaster and podcaster cutting costs, growing digital revenue

- IHRT bulls look for 50%-100% stock rise if company executes on strategic plan

I like iHeartMedia (IHRT) but right from the top I’ll mention the equity has one potentially significant problem that might scare away risk averse investors: it’s levered, 5.4 times levered at yearend 2019.  That could be an issue for some, and I won’t sugarcoat it.

However, if you’re still with me I also believe there are important extenuating circumstances—such as expected improving results and cash flow generation—that could give an investor comfort about the company’s outlook. Moreover, the bulls believe that if IHRT is able to successfully execute on its relatively straightforward financial and operational plans, the stock could rise 50% or more in the next few years. It’s my view that such a potential return would make up for the  risk.

What is iHeartMedia? Briefly, iHeartMedia (formerly known as Clear Channel) filed for Chapter 11 bankruptcy in March 2018 after amassing more than $20 billion in debt following a leveraged buyout a decade earlier. I won’t get into that since the company e...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free