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Cable ONE, Inc (CABO)
NYSE:CABO
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Cable ONE
(NYSE:CABO)
56Neutral
Positive Factors
Pricing Strategy
Cable One introduced a unique Pay-As-You-Go (PAYG) pilot program to fight FWA competition, targeting value-seeking customers and does not expect ARPU dilution.
Negative Factors
Competition
A sizable portion of CABO’s footprint is facing new fiber competition, which challenges the company's ability to materially grow penetration.
Financial Performance
Lower broadband revenue and higher costs lead to a reduced EBITDA estimate for 2025.
Cable ONE (CABO) vs. S&P 500 (SPY)
Market Cap
$1.57B
Dividend Yield4.23%
Average Volume (3M)166.34K
Price to Earnings (P/E)111.2
Beta (1Y)0.78
Revenue Growth-5.87%
EPS Growth-93.49%
CountryUS
Employees2,993
SectorCommunication Services
Sector Strength82
IndustryTelecommunications
Share Statistics
EPS (TTM)1.91
Shares Outstanding5,627,529
10 Day Avg. Volume227,064
30 Day Avg. Volume166,338
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)1.02
Price to Cash Flow (P/CF)2.40
P/FCF Ratio2.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$337.67Price Target Upside22.91% Upside
Rating ConsensusHold
Number of Analyst Covering4
Cable ONE Business Overview & Revenue Model
Company DescriptionCable ONE, Inc. is a cable and broadband communications provider. It provides consumers with an array of communications and entertainment services, including Internet and wireless fiber solutions, cable television and phone service under the brand name Sparklight. The company was founded in 1977 and is headquartered in Phoenix, AZ.
How the Company Makes MoneyCable ONE makes money through subscription-based services offered to residential and business customers. Its primary revenue stream is from high-speed internet services, which account for a significant portion of its earnings. The company also generates revenue from cable television and voice services, although these segments have been declining as the industry shifts towards internet-based solutions. Additionally, Cable ONE benefits from business services, which include broadband, telephone, and cloud-based services tailored for commercial clients. The company may also earn from advertising and other ancillary services. Partnerships with content providers and investments in infrastructure contribute to maintaining and enhancing its revenue streams.
Cable ONE Financial Statement Overview
Summary
Cable ONE demonstrates solid operational efficiency with strong gross and EBIT margins, but faces challenges with declining revenues and net income. The balance sheet reflects high leverage, posing potential financial risks. Cash flow performance is strong, with significant free cash flow growth, providing a buffer for financial operations despite declining income. The company should focus on improving net income margins and managing debt levels to enhance financial stability.Income Statement
The income statement shows a declining trend in revenue with a TTM (Trailing-Twelve-Months) revenue of $1.58 billion, down from $1.68 billion in the previous year. Gross profit margin remains strong at approximately 69.1% in TTM, indicating effective cost management. However, net profit margin has significantly decreased to 2.1% in TTM from 13.4% in the previous year, highlighting shrinking profitability. EBIT margin stands at 28.3% and EBITDA margin at 34.9% in TTM, both reflecting a decline but still indicating satisfactory operational efficiency.65
Positive
Balance Sheet
Cable ONE's balance sheet indicates a highly leveraged position with a debt-to-equity ratio of 2.0 in TTM, which is a concern for financial stability. The return on equity (ROE) has dropped to 1.9% in TTM from 12.4% in the previous year, suggesting decreased profitability for shareholders. The equity ratio stands at 27.5%, underscoring a moderate reliance on debt financing. The company's liquidity, as shown by cash holdings, has decreased, potentially limiting flexibility.58
Neutral
Cash Flow
The cash flow statement reveals strong operational cash flow, with an operating cash flow to net income ratio of 19.6 in TTM, indicating robust cash generation relative to net income. Free cash flow has grown significantly, with a free cash flow growth rate of 81.4% in TTM, showing effective capital management. However, the free cash flow to net income ratio is high at 15.6 in TTM, indicating potential over-reliance on free cash flow for profitability.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.58B | 1.68B | 1.71B | 1.61B | 1.33B | Gross Profit |
| 1.16B | 1.24B | 1.24B | 1.15B | 906.52M | EBIT |
| 441.88M | 526.90M | 538.99M | 456.57M | 369.29M | EBITDA |
| 523.00M | 924.43M | 888.02M | 814.23M | 655.26M | Net Income Common Stockholders |
| 14.48M | 224.62M | 234.12M | 291.82M | 304.39M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 153.63M | 190.29M | 215.15M | 388.80M | 574.91M | Total Assets |
| 6.53B | 6.76B | 6.91B | 6.95B | 4.49B | Total Debt |
| 3.60B | 3.66B | 3.81B | 3.84B | 2.18B | Net Debt |
| 3.44B | 3.47B | 3.59B | 3.45B | 1.60B | Total Liabilities |
| 4.73B | 4.95B | 5.16B | 5.16B | 2.99B | Stockholders Equity |
| 1.80B | 1.81B | 1.76B | 1.79B | 1.50B |
| Cash Flow | Free Cash Flow | |||
| 377.77M | 292.72M | 327.30M | 319.81M | 270.44M | Operating Cash Flow |
| 664.13M | 663.17M | 738.04M | 704.34M | 574.37M | Investing Cash Flow |
| -564.45M | -341.90M | -448.27M | -2.47B | -954.91M | Financing Cash Flow |
| -136.34M | -346.13M | -463.43M | 1.58B | 830.18M |
Cable ONE Technical Analysis
Negative
274.73
Price Trends
304.25
Negative
340.55
Negative
345.07
Negative
Market Momentum
-8.20
Negative
46.28
Neutral
79.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CABO, the sentiment is Negative. The current price of 274.73 is above the 20-day moving average (MA) of 273.42, below the 50-day MA of 304.25, and below the 200-day MA of 345.07, indicating a neutral trend. The MACD of -8.20 indicates Negative momentum. The RSI at 46.28 is Neutral, neither overbought nor oversold. The STOCH value of 79.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CABO.
Cable ONE Risk Analysis
Cable ONE disclosed 35 risk factors in its most recent earnings report. Cable ONE reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cable ONE Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $135.93B | 8.68 | 19.24% | 3.45% | 1.78% | 11.62% | |
74 Outperform | $56.39B | 10.11 | 38.11% | ― | 0.88% | 16.44% | |
60 Neutral | $11.63B | 13.36 | 9.05% | ― | 3.57% | 28.42% | |
60 Neutral | $1.09B | ― | 21.93% | ― | -3.06% | -290.86% | |
59 Neutral | $29.20B | 0.14 | -12.92% | 4.06% | 2.18% | -51.74% | |
56 Neutral | $1.57B | 111.20 | 0.80% | 4.23% | -5.87% | -93.49% | |
51 Neutral | $370.47M | ― | -35.57% | ― | -7.35% | 64.18% |
* Communication Services Sector Average
Performance Comparison
CABO
Cable ONE
274.73
-165.00
-37.52%
CHTR
Charter Communications
349.75
51.35
17.21%
CMCSA
Comcast
35.19
-6.75
-16.09%
LBRDA
Liberty Broadband
79.96
21.66
37.15%
WOW
Wideopenwest
4.29
1.22
39.74%
ATUS
Altice Usa
2.47
-0.32
-11.47%
Cable ONE Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 3.03% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Negative
The earnings call highlighted positive developments in business broadband growth, technological advancements, and improved capital expenditure efficiency. However, these were overshadowed by significant declines in total and residential data revenues, a substantial net loss, and challenges in a competitive environment. The sentiment is negative due to these outweighing lowlights.Highlights
Business Broadband Revenue Growth
Business broadband revenue increased by 2.6% year-over-year, driven by high-value carrier, wholesale, and enterprise customers.
Implementation of Advanced Technology
Launched AI models to enhance customer service and operational efficiency, including a churn propensity model and project management tools.
Capital Expenditure Efficiency
Capital expenditures decreased significantly to $286.4 million in 2024 from $371 million in 2023, demonstrating capital efficiency.
Strong Cash Flow Growth
Adjusted EBITDA less capital expenditures increased by 25% year-over-year in Q4 2024.
Expansion in Business Segments
Positive outlook for growth in Carrier, Enterprise, and Wholesale segments for 2025.
Lowlights
Decline in Total Revenues
Total revenues for Q4 2024 decreased by 6% year-over-year and full-year revenues declined by 5.9%.
Residential Data Revenue Decline
Residential data revenues decreased by 5.4% year-over-year, impacted by the discontinuation of the affordable connectivity program.
Significant Net Loss
Reported a net loss of $105.2 million for Q4 2024 compared to a net income of $103.5 million in Q4 2023, primarily due to non-cash charges related to the MBI investment.
Decreased Residential Data ARPU
ARPU for residential data customers declined by 5% year-over-year in Q4 2024.
Challenging Competitive Environment
Mentioned increased competition from incumbents with new fiber deployments, impacting market dynamics.
Company Guidance
During the Cable One Fourth Quarter and Full Year 2024 Earnings Conference Call, several key metrics and strategic initiatives were discussed. The company reported total revenues of $1.58 billion for 2024, marking a 5.9% decrease from the previous year, with a 5.5% decline in residential data revenues and a 2.6% increase in business data revenues. Adjusted EBITDA was $854 million, a 6.9% decrease year-over-year, and capital expenditures totaled $286.4 million. Notably, residential data ARPU was $80.39, down 4.9% from 2023, although it stabilized in the latter half of the year. Cable One emphasized its focus on broadband revenue growth, targeting specific market segments to drive unit growth and ARPU expansion. The company also highlighted its strategic initiatives, such as network upgrades, AI integration, and a unified billing system migration, aimed at enhancing customer experience and operational efficiency. Additionally, the company discussed its competitive positioning, noting a decrease in new third-party overbuilds and its confidence in maintaining favorable market dynamics. Cable One's net leverage ratio stood at 4.1 times, with a focus on reducing leverage through strategic monetizations and refinancing strategies. Looking ahead, Cable One expressed optimism about its growth prospects in 2025, driven by its phased plan for long-term growth and strategic investments.Cable ONE Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Cable ONE Amends Partnership to Acquire MBI Stake
Positive
Dec 20, 2024
Cable One has amended its strategic partnership agreement with Mega Broadband Investments Holdings LLC (MBI) to enhance timing flexibility for potentially acquiring full ownership of MBI. The amended agreement includes a $250 million cash payment and access to $100 million in new debt proceeds by MBI unit holders, thereby adjusting the purchase price for Cable One’s future acquisition of the remaining 55% interest it does not own. The company’s strategic investment in MBI supports its mission to deliver broadband services in rural America, with the partnership expected to optimize Cable One’s capital structure and strengthen its market position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.