Goldman Sachs Slaps Sell Rating on iHeartMedia, Citing Valuation Fears After Stellar Run
In a move that has stirred debate among media investors, Goldman Sachs has downgraded shares of audio giant iHeartMedia, Inc. (NASDAQ: IHRT) from Neutral to Sell. The firm also slashed its price target to $3.50 from $4.00, pointing to valuation concerns after the stock's remarkable 123% surge in 2025.
In its research note, Goldman analysts highlighted growing structural headwinds. They argued that fundamental changes in how audiences consume audio—alongside evolving digital advertising dynamics—are undermining iHeartMedia's capacity to maintain long-term sales growth across its broadcast, streaming, and podcasting portfolio. "Recent stock performance appears disconnected from these enduring challenges to revenue durability," the note stated.
The downgrade comes despite iHeartMedia posting third-quarter 2025 results largely in line with expectations, including an adjusted EBITDA of $205 million. Strategically, the company is pushing aggressively into digital realms. A highlight of the quarter was a new partnership with TikTok, launching a series of podcasts from top creators and a dedicated broadcast radio station on the platform. This initiative is core to iHeartMedia's plan to expand its reach and engage the elusive Gen Z and millennial demographics.
Founded in 1972 as a single radio station, San Antonio-based iHeartMedia has transformed into a U.S. audio behemoth. Its 2019 IPO cemented its status as a multi-platform leader, yet the company now navigates a landscape where traditional radio listenership is declining while competition for digital ears intensifies.
Investor Reactions: A Clash of Perspectives
Michael Torres, Portfolio Manager at Horizon Capital: "Goldman is right to sound the caution. The valuation had gotten ahead of itself. iHeart's core broadcast business is a cash cow, but it's in secular decline. Their digital investments are promising, but monetizing that new audience at scale is a much tougher road than the market was pricing in."
Sarah Chen, Media Analyst at ClearView Insights: "This feels like a classic case of short-term thinking. The TikTok deal is a masterstroke for relevance. Yes, there are headwinds, but iHeart's national footprint and content library are massive moats. This sell rating overlooks their unique position to bridge traditional and digital audio."
David "Axe" Miller, Independent Investor & Newsletter Author: "It's about time someone called this out. A 123% pop on what? Nostalgia for radio? The advertising model is broken, and podcasts are a saturated, low-margin game. This downgrade is just the first reality check. I give it six months before we see guidance cuts."
Priya Sharma, Tech & Media Strategist: "The market is punishing transition stories. iHeart is trying to pivot a tanker. Their partnership strategy with platforms like TikTok is smart—it's essentially outsourcing audience acquisition. The long-term potential is there if they can successfully integrate these digital touchpoints into a unified ad platform."