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Altice Usa (ATUS)
NYSE:ATUS
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Altice Usa
(NYSE:ATUS)
60Neutral
Positive Factors
Network Strategy
Shifting the network strategy from fiber overbuild to a mid-split HFC upgrade is notable and directionally similar to Comcast's approach.
Operational Improvements
The company is going to start showing the impact from the operational changes that management has put in place.
Negative Factors
Competition
The competitive environment remains intense from both fixed wireless operators and fiber overbuilders.
Execution Risk
ATUS still has significant execution risk as its turnaround efforts are challenged by several factors, including growing broadband competition and significant leverage.
Financial Performance
ATUS reported mostly lower than projected financial and operating results, with EBITDA and FCF much lighter than projected.
Altice Usa (ATUS) vs. S&P 500 (SPY)
Market Cap
$1.09B
Dividend YieldN/A
Average Volume (3M)3.14M
Price to Earnings (P/E)―
Beta (1Y)1.32
Revenue Growth-3.06%
EPS Growth-290.86%
CountryUS
Employees10,900
SectorCommunication Services
Sector Strength82
IndustryTelecommunications
Share Statistics
EPS (TTM)-0.22
Shares Outstanding278,980,530
10 Day Avg. Volume3,138,112
30 Day Avg. Volume3,135,121
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.12
Price to Cash Flow (P/CF)0.60
P/FCF Ratio0.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.36Price Target Upside-4.45% Downside
Rating ConsensusHold
Number of Analyst Covering8
Altice Usa Business Overview & Revenue Model
Company DescriptionAltice USA, Inc. engages in the provision of broadband, pay television, telephony services, proprietary content, and advertising services. Its brands include Optimum, Suddenlink, Lightpath, AMS, News 12 Networks, and News 12 Varsity. The company operates through the Cablevision and Cequel business segments. Altice USA was founded by Patrick Drahi in 2001 and is headquartered in Long Island City, NY.
How the Company Makes MoneyAltice USA generates revenue through several key streams. The primary revenue source is its broadband and video services, where customers pay for subscriptions to high-speed internet and television packages. The company also earns money through its mobile services, offering competitive plans and bundles to enhance customer connectivity. Additionally, Altice USA benefits from digital advertising revenues, leveraging its media assets to provide targeted advertising solutions. Significant partnerships with content providers and network infrastructure investments further enhance its service offerings and customer reach, contributing to its overall earnings.
Altice Usa Financial Statement Overview
Summary
Altice USA is experiencing financial challenges characterized by declining revenue, profitability issues, and high leverage. Despite these challenges, the positive operating cash flow and growth in free cash flow indicate some financial resilience. However, the overall financial health requires strategic initiatives to address the declining revenue and high debt load.Income Statement
The TTM (Trailing-Twelve-Months) shows a decline in revenue with a negative net income, indicating profitability issues. Gross and EBIT margins remain stable, but the net profit margin has deteriorated significantly compared to previous periods. Revenue growth has been negative, pointing to potential challenges in market penetration or customer retention.58
Neutral
Balance Sheet
The company has a negative stockholders' equity, which is a significant concern. The high debt-to-equity ratio indicates leverage risk, and ROE is negative due to losses, which impacts potential returns for investors. The equity ratio is unfavorable, reflecting financial instability.45
Neutral
Cash Flow
Operating cash flow remains positive, although it has declined from previous years. The free cash flow shows some growth, yet the operating cash flow to net income ratio is high due to negative net income, indicating reliance on cash flow management over profit.62
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.95B | 9.24B | 9.65B | 9.65B | 10.09B | 9.89B | Gross Profit |
| 4.89B | 6.21B | 6.44B | 6.44B | 6.71B | 6.55B | EBIT |
| 1.68B | 1.70B | 1.80B | 1.80B | 2.52B | 2.12B | EBITDA |
| 3.36B | 3.40B | 3.71B | 4.33B | 4.29B | 4.16B | Net Income Common Stockholders |
| -102.92M | 53.20M | 194.56M | 194.56M | 990.31M | 436.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 256.53M | 302.06M | 305.48M | 305.48M | 195.71M | 278.42M | Total Assets |
| 31.70B | 31.92B | 33.66B | 33.66B | 33.22B | 33.38B | Total Debt |
| 25.31B | 25.39B | 26.85B | 26.85B | 26.78B | 26.98B | Net Debt |
| 25.06B | 25.04B | 26.54B | 26.54B | 26.59B | 26.70B | Total Liabilities |
| 32.16B | 32.36B | 34.17B | 34.17B | 34.09B | 34.58B | Stockholders Equity |
| -469.24M | -422.18M | -475.21M | -475.21M | -819.79M | -1.14B |
| Cash Flow | Free Cash Flow | ||||
| 149.39M | 121.59M | 452.62M | 452.62M | 1.62B | 1.91B | Operating Cash Flow |
| 1.58B | 1.83B | 2.37B | 2.37B | 2.85B | 2.98B | Investing Cash Flow |
| -1.46B | -1.71B | -1.92B | -1.92B | -1.57B | -1.22B | Financing Cash Flow |
| -164.72M | -122.59M | -335.91M | -335.91M | -1.36B | -2.18B |
Altice Usa Technical Analysis
Neutral
2.47
Price Trends
2.70
Negative
2.61
Negative
2.34
Positive
Market Momentum
-0.09
Positive
40.71
Neutral
16.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATUS, the sentiment is Neutral. The current price of 2.47 is below the 20-day moving average (MA) of 2.69, below the 50-day MA of 2.70, and above the 200-day MA of 2.34, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 40.71 is Neutral, neither overbought nor oversold. The STOCH value of 16.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ATUS.
Altice Usa Risk Analysis
Altice Usa disclosed 24 risk factors in its most recent earnings report. Altice Usa 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
Altice Usa 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 | 8.72 | 19.24% | 3.43% | 1.78% | 11.62% | |
74 Outperform | $56.39B | 10.11 | 38.11% | ― | 0.88% | 16.44% | |
60 Neutral | $1.09B | ― | 21.93% | ― | -3.06% | -290.86% | |
60 Neutral | $11.63B | 13.36 | 9.05% | ― | 3.57% | 28.42% | |
59 Neutral | $29.20B | 0.14 | -12.92% | 4.06% | 2.18% | -51.74% | |
52 Neutral | $320.57M | ― | -5.13% | 4.53% | -1.03% | -204.03% | |
51 Neutral | $370.47M | ― | -35.57% | ― | -7.35% | 64.18% |
* Communication Services Sector Average
Performance Comparison
ATUS
Altice Usa
2.47
-0.32
-11.47%
ATNI
ATN International
20.36
-10.47
-33.96%
CHTR
Charter Communications
349.75
51.35
17.21%
CMCSA
Comcast
35.19
-6.75
-16.09%
LBRDA
Liberty Broadband
81.16
22.86
39.21%
WOW
Wideopenwest
4.29
1.22
39.74%
Altice Usa Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -8.86% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in fiber and mobile segments and capital efficiency improvements, but these were offset by overall revenue decline, broadband subscriber losses, and competitive challenges in the West. The sentiment is balanced with both positive network and revenue achievements and notable challenges.Highlights
Fiber and Mobile Growth
Q4 marked the best ever quarter for fiber net additions of 57,000, a 22% increase year-over-year. Mobile growth also saw a significant increase with 40,000 line net additions, the best performance in the last five years and a 70% acceleration in mobile line net additions in 2024.
Revenue Achievements in Key Areas
Residential mobile service revenue and LightPath achieved their highest ever revenue in full-year 2024. LightPath revenue grew by 5.5% year-over-year to $414 million.
Capital Efficiency
Capital expenditures decreased by 16% year-over-year to $1.4 billion while maintaining strategic growth objectives. Free cash flow grew by 23% year-over-year to $149 million.
Improved Network Quality
Optimum Fiber was ranked as having the fastest and most reliable Internet speeds in New York and New Jersey, and also ranked the lowest latency and best gaming experience in those areas.
Lowlights
Overall Revenue Decline
Total revenue of $9 billion declined 3.1% year-over-year, with residential revenue declining by 4.6%.
Broadband Subscriber Losses
Broadband subscriber net losses in Q4 were 39,000, impacted by a hurricane in North Carolina and low home sales pressure on gross adds.
Competitive Challenges
The West footprint faced more challenges due to incremental fiber overbuilders and fixed wireless competition, with a greater proportion of income-constrained households.
Increased Direct Costs
Direct costs increased, mainly driven by the expansion of the mobile business, and programming costs, despite a reduction in volume.
Company Guidance
During Altice USA's Q4 and full-year 2024 earnings call, the company detailed significant strides in various operational and financial measures. They reported a 22% year-over-year increase in fiber net additions, reaching 57,000 in Q4, and a 40,000 line net addition in mobile, marking the best performance in five years. The company ended 2024 with 4.3 million broadband subscribers and 460,000 mobile lines, although broadband subscriber net losses were 39,000, influenced by factors such as a hurricane in North Carolina. Despite a 3.1% year-over-year revenue decline to $9 billion, Altice USA improved its gross margin to 67.7% and achieved a 23% growth in free cash flow to $149 million, even with a 5.4% decline in adjusted EBITDA to $3.4 billion. The company also highlighted a strategic shift towards new fiber builds and mid-split upgrades, with cash capital expenditures declining by 16% year-over-year to $1.4 billion. Their efforts in optimizing their product portfolio and enhancing customer experience were evident, with residential ARPU stabilizing and video cost inflation per subscriber reduced to approximately 4%. In 2025, Altice plans to continue its transformation journey by focusing on broadband subscriber trends, capital efficiency, network strengthening, and maintaining a sustainable capital structure.Altice Usa Corporate Events
Executive/Board Changes
Altice USA Approves Salary Increases for Top Executives
Neutral
Feb 10, 2025
On February 4, 2025, Altice USA’s Board of Directors approved significant salary increases for CEO Dennis Mathew and CFO Marc Sirota. Effective January 1, 2025, Mathew’s salary will be $1,550,000 with additional incentives, while Sirota will receive a base salary of $650,000 and a target cash incentive award at 150% of his salary.
Executive/Board Changes
Altice USA CEO Receives $5 Million Performance Award
Neutral
Dec 20, 2024
Altice USA’s Compensation Committee approved a $5.0 million cash performance award for CEO Dennis Mathew, under the company’s Long Term Incentive Plan. The award’s vesting is contingent on meeting revenue and EBITDA targets by fiscal year 2027, incentivizing leadership to drive performance improvements.
Executive/Board Changes
Altice USA EVP Colleen Schmidt to Resign
Neutral
Dec 12, 2024
Altice USA announced that Colleen Schmidt will resign as Executive Vice President, Human Resources, effective December 31, 2024, transitioning to an advisory role until March 28, 2025. Despite her resignation, Schmidt will assist with the transition of her responsibilities, continue to receive her base salary, and remain eligible for her annual bonus and Company benefits until her departure.
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.