At 70p, are shares in this FTSE 100 stock a bargain worth buying right now?

I sold my remaining holdings in ITV (LSE:ITV) around this point last year. Since then, the FTSE 100 stock’s share price has nearly halved in value (ITV stock has a total return of -45.1% over the past 12 months).  Considering I was willing to buy ITV shares for nearly double its current value just a year ago, I cannot help but think the stock could be a bargain for my portfolio right now.

Could this be a bargain?

For a start, the company’s current financial position looks healthy despite ITV stock being unfancied by investors. It has low levels of debt, a healthy balance sheet and its recent first quarter results showed double digit revenue growth when compared with the same point last year.

Moreover, the stock’s price-to-earnings ratio (7x) looks like good value relative to the UK Media industry average (25.4x), while it also has a healthy dividend yield of 4.9%.

Encouragingly, total digital revenue for ITV has grown by 24%, with digital advertising up by a ‘strong’ 27%, and subscription revenues up an impressive 37%.

All this bodes well for the traditional broadcaster as it competes for subscriptions and viewers with the streaming giants. But are recent positive developments obscuring a bleaker long-term outlook for ITV stock?

The long-term risks

The share price decline of ITV stock over the last 12 months is not new. The broadcaster has lost two-thirds of its stock value over the past five years. The bearish sentiment on ITV stock could reflect a longer-term trend.

Television viewing figures continue to decline. Research by Deloitte highlighted that between 2010 and 2019, TV viewing hours, as well as ad revenues, fell by 21% across all viewers in the United Kingdom.

As such, I believe that ITV’s long-term future is firmly entrenched in the success or failure of its ITVX streaming platform. The company is investing £2.6bn into streaming over this year and 2023. This is a colossal amount for a firm with a £2.7bn market cap. 

The hope is that ITV is able to maintain — as well as grab — some market share from the streaming leaders like Netflix, Disney+ and Amazon Prime. I am unconvinced it will. 

ITV has been one of the FTSE 100’s poorest performers since the New Year, and the steep fall in price would normally indicate the stock could be in bargain territory for me to buy, but I remain anxious because of the many challenges it faces to remain relevant in the future, just as its peer, the British Broadcasting Corporation (BBC), is similarly trying to achieve.

ITV may be a victim of changing consumer viewing and engagement habits in a more fragmented media industry; bad news that I fear may already been priced into the stock’s share price.

In regard to purchasing new ITV shares, I’d rather watch from the sidelines for the time being and see how events play out.