Cable ONE (CABO) AI Stock Analysis

• Market Cap: $1.49B
• Dividend Yield: 4.45%
• Average Volume (3M): 172.99K
• Price to Earnings (P/E): 102.9
• Beta (1Y): 0.73
• Revenue Growth: -5.87%
• EPS Growth: -93.49%
• Country: US
• Employees: 2,817
• Sector: Communication Services
• Sector Strength: 79
• Industry: Telecommunications Services
• EPS (TTM): 1.91
• Shares Outstanding: 5,627,527
• 10 Day Avg. Volume: 128,809
• 30 Day Avg. Volume: 172,985
• PEG Ratio: 0.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.91
• Price to Cash Flow (P/CF): 2.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $337.67
• Price Target Upside: 27.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Cable ONE's score reflects solid cash flow and operational efficiency but is hindered by declining revenues, high leverage, and a challenging competitive environment. The technical analysis suggests bearish momentum, while the high P/E ratio raises valuation concerns. Despite positive corporate events, the overall sentiment remains cautious due to financial and market challenges.

Positive Factors

Operational Efficiency

CABO is in the later stages of its opex investments that should continue to bolster subscriber stabilization and EBITDA uplift when complete.

Strategic Initiatives

CABO 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.

Growth Prospects

There is skepticism about Cable ONE's ability to drive significant subscriber growth due to increasing competition, with fiber overlap rising to 42% from around 25% in the previous year.

Market Dynamics

The anticipated end of the ACP subsidy is expected to create ongoing challenges for subscriber growth, adding to the existing competitive pressures from FWA and fiber.

Cable ONE Business Overview & Revenue Model

Company Description

Cable One, Inc., together with its subsidiaries, provides data, video, and voice services in the United States. The company offers residential data services, a service to enhance Wi-Fi signal throughout the home. It also provides residential video services, such as local networks; local community programming that includes governmental and public access; and other channels, as well as digital video services, including national and regional cable networks, music channels, and an interactive and electronic programming guide with parental controls. In addition, the company offers premium channels that offer movies, original programming, live sporting events, and concerts and other features; and advanced video services, such as whole-home DVRs and high-definition set-top boxes, as well as TV Everywhere product, which enables its video customers to stream various channels and shows to mobile devices and computers. Further, it provides residential voice services comprising local and long-distance calling, voicemail, call waiting, three-way calling, caller ID, anonymous call rejection, and other features, as well as international calling by the minute services. Additionally, the company offers data, voice, and video products to business customers, including small to mid-markets, enterprises, and wholesale and carrier customers. As of December 31, 2021, it served approximately 1.2 million residential and business customers in 24 states through its Sparklight, Fidelity, and Clearwave brands. Cable One, Inc. was incorporated in 1980 and is headquartered in Phoenix, Arizona.

How the Company Makes Money

Cable 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 265.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CABO, the sentiment is Neutral. The current price of 265.13 is above the 20-day moving average (MA) of 259.81, below the 50-day MA of 267.95, and below the 200-day MA of 334.07, indicating a neutral trend. The MACD of -3.66 indicates Negative momentum. The RSI at 49.27 is Neutral, neither overbought nor oversold. The STOCH value of 77.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CABO.

Cable ONE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	58 Neutral	$26.33B	3.17	-10.68%	4.33%	2.16%	-43.07%
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%
LILAK	50 Neutral	$1.03B	―	-45.55%	―	-1.31%	-1163.93%
LILA	47 Neutral	$1.04B	―	-45.55%	―	-1.31%	-1163.93%
WOW	46 Neutral	$360.74M	―	-25.18%	―	-8.13%	79.68%
SHEN	41 Neutral	$694.48M	―	-4.05%	0.79%	14.16%	-443.30%

Cable ONE Corporate Events

Cable ONE Amends Partnership to Acquire MBI Stake

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.