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Entercom Communications Strikes Out as Its Stock Falls 16%

By Rich Duprey - Feb 24, 2021 at 11:55AM

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Tough fourth-quarter results are to blame.

What happened

Shares of Entercom Communications (ETM 1.24%) were tumbling 16% in morning trading Wednesday after the radio broadcaster reported fourth-quarter revenue that was up 19% sequentially, but down 22% year over year.

So what

CEO David Field said "the pandemic continues to hobble a large number of our advertisers, particularly locally," but he was hopeful the combination of widely distributed vaccines, new stimulus spending, and pent-up consumer demand would drive a strong recovery.

Microphone with on-air sign

Image source: Getty Images.

Now what

Entercom stock is up 150% so far this year, even after the drubbing it's taking today, on a rally that largely began last October after it announced it had signed a six-year deal with Flutter Entertainment's (PDYPF -0.04%) FanDuel as its official sportsbook partner. Entercom says it's "the largest advertising deal in the history of the radio industry." Flutter is the world's largest bookmaker. 

Sports betting has become a hot growth market since the ban on it was overturned in 2018. FanDuel has quickly become the largest sportsbook in the U.S.

In the fourth quarter, Entercom acquired QL Gaming, a platform that provides sports-betting data and predictive analytics that the broadcaster believes complements its sports audio business.

The fall in Entercom Communications stock today may be a case of buy the rumor, sell the news for the radio broadcaster.

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Stocks Mentioned

Entercom Communications Corp. Stock Quote
Entercom Communications Corp.
ETM
$1.64 (1.24%) $0.02
Flutter Entertainment PLC Stock Quote
Flutter Entertainment PLC
PDYPF
$115.70 (-0.04%) $0.05

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