Altice Usa (ATUS) AI Stock Analysis

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Altice Usa

(NYSE:ATUS)

51Neutral

Altice USA's stock faces significant challenges with high financial leverage and declining revenue. While there are positive developments in fiber and mobile growth and capital efficiency, the overall financial instability and competitive pressures weigh heavily on the stock's attractiveness. Strategic improvements could enhance its position, but risks remain high.

Positive Factors

Market Strategy

The approach towards low-income consumers should resonate well with that market, and the customers will be attracted to a quality product that matches FWA pricing.

Operational Improvements

The network upgrades and rebuilding of the care and management teams are starting to have a noticeable impact.

Negative Factors

Competition

ATUS has significant execution risk due to still growing broadband competition from fiber operators and fixed wireless access providers.

Financial Performance

ATUS reported mostly lower than projected financial and operating results, with EBITDA and FCF much lighter than projected.

Leverage and Capital Expenditure

The company remains challenged by its high leverage at 7.4x for CSC Holdings, especially in consideration of declining EBITDA, fiber investments and still elevated capital expenditures.

Altice Usa (ATUS) vs. S&P 500 (SPY)

Market Cap

$1.07B

Dividend YieldN/A

Average Volume (3M)2.95M

Price to Earnings (P/E)―

Beta (1Y)1.16

Revenue Growth-3.06%

EPS Growth-290.86%

CountryUS

Employees10,900

SectorCommunication Services

Sector Strength79

IndustryTelecommunications Services

Share Statistics

EPS (TTM)-0.12

Shares Outstanding278,980,530

10 Day Avg. Volume4,000,569

30 Day Avg. Volume2,949,386

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.14

Price to Cash Flow (P/CF)0.70

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

$2.36

Price Target Upside-4.07% Downside

Rating ConsensusHold

Number of Analyst Covering8

Altice Usa Business Overview & Revenue Model

Company DescriptionAltice USA, Inc., together with its subsidiaries, provides broadband communications and video services in the United States, Canada, Puerto Rico, and the Virgin Islands. It offers broadband, video, telephony, and mobile services to approximately five million residential and business customers. The company's video services include delivery of broadcast stations and cable networks; over the top services; video-on-demand, high-definition channels, digital video recorder, and pay-per-view services; and platforms for video programming through mobile applications. It also provides voice over Internet protocol telephone services; and mobile services, such as data, talk, and text. In addition, the company offers Ethernet, data transport, IP-based virtual private networks, Internet access, and telephony services; hosted telephony services, managed Wi-Fi, managed desktop and server backup, and collaboration services comprising audio and web conferencing; fiber-to-the-tower services to wireless carriers; data services consisting of wide area networking and dedicated data access, as well as wireless mesh networks; and enterprise class telephone services that include traditional multi-line phone service. Further, it provides business e-mail, hosted private branch exchange, web space storage, and network security monitoring; and international calling and toll free numbers. Additionally, the company offers audience-based and IP-authenticated cross-screen advertising solutions; and television and digital advertising services, as well as operates news channels under the News 12 Networks, Cheddar, and i24NEWS names. It also provides broadband communications and video services under the Optimum and Suddenlink brands. The company was incorporated in 2015 and is headquartered in Long Island City, New York.

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 faces financial challenges with declining revenue and profitability, high leverage, and negative equity. While cash flow management shows some resilience, the overall financial health suggests a need for strategic restructuring or growth initiatives to stabilize and improve financial performance.

Income Statement

Neutral

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.

Balance Sheet

Neutral

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.

Cash Flow

Positive

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.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
8.95B	9.24B	9.65B	10.09B	9.89B	9.76B
	Gross Profit
6.06B	6.21B	6.44B	6.71B	6.55B	6.46B
	EBIT
1.68B	1.70B	1.80B	2.52B	2.12B	1.82B
	EBITDA
3.32B	3.40B	3.62B	4.36B	4.02B	3.99B
	Net Income Common Stockholders
-102.92M	53.20M	194.56M	990.31M	436.18M	138.94M
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

Technical Analysis Sentiment

Negative

Last Price2.46

Price Trends

50DMA

2.64

Negative

100DMA

2.61

Negative

200DMA

2.37

Negative

Market Momentum

MACD

-0.09

Positive

RSI

41.67

Neutral

STOCH

47.87

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATUS, the sentiment is Negative. The current price of 2.46 is below the 20-day moving average (MA) of 2.55, below the 50-day MA of 2.64, and above the 200-day MA of 2.37, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 41.67 is Neutral, neither overbought nor oversold. The STOCH value of 47.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMCSA	77 Outperform	$127.50B	8.14	19.24%	3.68%	1.78%	11.62%
CHTR	68 Neutral	$53.94B	9.75	38.11%	―	0.88%	16.44%
TDS	64 Neutral	$3.92B	―	-0.54%	0.45%	-3.80%	83.27%
Sector *	58 Neutral	$26.42B	2.90	-10.89%	4.33%	2.18%	-46.94%
VEON	58 Neutral	$2.90B	7.05	39.15%	―	7.44%	-360.33%
CABO	56 Neutral	$1.49B	102.93	0.80%	4.45%	-5.87%	-93.49%
ATUS	51 Neutral	$1.07B	―	21.93%	―	-3.06%	-290.86%

* Communication Services Sector Average

Performance Comparison

ATUS

Altice Usa

2.29

0.35

18.04%

CHTR

Charter Communications

343.18

85.61

33.24%

CMCSA

Comcast

34.40

-3.45

-9.11%

CABO

Cable ONE

265.45

-108.61

-29.04%

TDS

Telephone & Data Systems

36.93

21.96

146.69%

VEON

41.06

17.99

77.98%

Altice Usa Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -9.23% | Next Earnings Date: May 8, 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.

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.