Fireside chat highlights. This report highlights a virtual non deal road show in a fireside chat format with Christopher Young, Entravision's CFO. The video of the discussion may be found here on Channelchek.com. The wide ranging discussion included topics such as M&A opportunities; its fast growing Digital businesses; Capital Allocation, given its high free cash flow conversion (90%) and strong balance sheet; its Univision relationship, spectrum auction prospects; and, current revenue pacing trends, among others. Still a growth industry. While many media companies, including Entravision, are diversifying outside of traditional radio and television broadcasting, management believes that its terrestrial broadcast businesses offer growth, given its orientation on the growing Hispanic community. While Auto as a category may be slow to come back, the company has developing other ad categories, including sports betting in large markets like California and Florida that are likely to legalize sports betting. Digital transition. The company has made several recent acquisitions of digital-based businesses. The first of these was the acquisition of Cisneros, which sells advertising for Facebook in Latin America. Entravision was able to more than triple Cisneros’ line of credit, boosting revenues and tripling its cash flow generation in just over a year. Management highlighted that the company has been building on the successful acquisition of Cisneros by purchasing digital businesses in other parts of the world, including Media Donuts. Entravision also acquired a digital platform called 365, a rep for TikTok in Africa. Spectrum value proposition? Management stated that it appears likely that there will be another FCC spectrum auction in the future. As such, the company is not selling any of its TV assets. In the last broadcast auction for the company, 4 of its stations commanded a combined $264 million. It's Boston station alone could have brought in $300 million in proceeds, according to management. Rating is Outperform. Entravision's EV multiple to our 2022 adjusted EBITDA estimate is a compelling 7.7x. In our view, key catalysts toward higher stock valuations may include positive upside surprise potential in cash flow estimates, accretive acquisitions given its cash rich balance sheet, and M&A activity that highlights the value of its Digital businesses. Read More >>