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Uniti Group (UNIT)
:UNIT
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Uniti Group
(NASDAQ:UNIT)
64Neutral
Positive Factors
Fiber Network Market
Uniti sees significant future growth in the Fiber Network market, with the total addressable market expected to increase to $50B by 2030.
FTTH Deployment
Kinetic plans to accelerate its FTTH deployment, aiming to reach 2 million homes earlier than planned, signaling growth potential.
GenAI Demand
UNIT posted good results with bullish commentary around GenAI fiber demand, raised rev guidance by $3MM on strong demand, but maintained EBITDA guidance.
Negative Factors
Capital Expenditure
The acceleration of FTTH deployment means higher upfront capital expenditure, resulting in more free cash flow pressure.
Dividend and Financial Outlook
Analyst reiterates an Underperform rating due to the elimination of an attractive dividend, high leverage, and uncertain financial outlook as UNIT awaits the Windstream acquisition to close.
Wireless Bookings
Wireless bookings came in flat for 2024, which was below management's expectations.
Uniti Group (UNIT) vs. S&P 500 (SPY)
Market Cap
$1.21B
Dividend Yield12.1%
Average Volume (3M)2.24M
Price to Earnings (P/E)12.9
Beta (1Y)0.92
Revenue Growth1.49%
EPS GrowthN/A
CountryUS
Employees758
SectorReal Estate
Sector Strength76
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.38
Shares Outstanding244,229,230
10 Day Avg. Volume1,613,940
30 Day Avg. Volume2,244,197
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap5.85
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.07
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.67Price Target Upside54.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Uniti Group Business Overview & Revenue Model
Company DescriptionUniti Group Inc. (UNIT) is a real estate investment trust (REIT) focused on the acquisition and construction of mission-critical communications infrastructure in the United States. The company primarily operates in the telecommunications sector, providing high-speed broadband infrastructure solutions, including fiber optic cables, wireless tower infrastructure, and other network solutions. Uniti Group's core services are designed to support the growing demand for data and connectivity, catering to various telecommunications companies and service providers.
How the Company Makes MoneyUniti Group Inc. generates revenue primarily through leasing its communications infrastructure assets, such as fiber networks and wireless towers, to telecommunications companies and service providers. The company's revenue model is based on long-term lease agreements, which provide predictable and stable cash flows. Key revenue streams include lease payments from tenants who utilize Uniti's fiber networks and tower sites to deliver broadband and wireless services. Additionally, Uniti may engage in strategic partnerships and joint ventures to expand its infrastructure and service offerings, further contributing to its earnings. The company also explores opportunities for growth through acquisitions and development of new infrastructure to meet the increasing demand for high-capacity communication networks.
Uniti Group Financial Statement Overview
Summary
Uniti Group exhibits a mixed financial performance with solid revenue growth and operational margins. However, profitability concerns and negative equity highlight financial instability risks. Improvements in cash flow management are encouraging, yet the balance sheet structure remains a significant concern. The company needs to address its leverage and profitability issues for a healthier financial outlook.Income Statement
Uniti Group has demonstrated a steady growth in revenues with a CAGR over the years. The gross and EBIT margins are healthy, indicating solid operational efficiency. However, the net income remains volatile, with significant fluctuations, indicating underlying profitability issues. The company has shown improvement in profitability with a net income turning positive in 2024 compared to losses in previous years.65
Positive
Balance Sheet
The balance sheet reflects a concerning financial structure with negative stockholders' equity, driven by high liabilities. Despite this, the reduction in total debt in 2024 is notable. The debt-to-equity ratio is not applicable due to negative equity. The equity ratio is negative, highlighting potential financial instability.45
Neutral
Cash Flow
Uniti Group shows a positive trend in operating cash flows, indicating good cash generation capacity. Free cash flow has improved significantly in 2024, turning positive, showing better capital management. The operating cash flow to net income ratio is solid, but the volatile net income affects free cash flow ratios, highlighting cash flow sustainability risks.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.17B | 1.15B | 1.13B | 1.10B | 1.07B | Gross Profit |
| 1.17B | 695.03M | 1.12B | 1.10B | 907.70M | EBIT |
| 606.72M | 578.38M | 599.21M | 542.98M | 461.62M | EBITDA |
| 879.31M | 642.35M | 891.99M | 833.92M | 92.42M | Net Income Common Stockholders |
| 91.31M | -81.71M | -10.49M | 123.66M | -718.91M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 155.59M | 62.26M | 43.80M | 58.90M | 77.53M | Total Assets |
| 5.28B | 5.03B | 4.85B | 4.81B | 4.73B | Total Debt |
| 5.88B | 5.63B | 5.27B | 5.11B | 4.83B | Net Debt |
| -183.85M | 5.56B | 5.23B | 5.05B | 4.75B | Total Liabilities |
| 7.73B | 7.51B | 7.12B | 6.92B | 6.80B | Stockholders Equity |
| -2.45B | -2.49B | -2.27B | -2.13B | -2.14B |
| Cash Flow | Free Cash Flow | |||
| 11.86M | -63.87M | 32.55M | 113.30M | -159.85M | Operating Cash Flow |
| 366.69M | 353.13M | 460.12M | 499.16M | 157.23M | Investing Cash Flow |
| -272.20M | -411.31M | -392.02M | -321.22M | 1.39M | Financing Cash Flow |
| 27.08M | 76.64M | -78.58M | -196.57M | -223.91M |
Uniti Group Technical Analysis
Neutral
4.96
Price Trends
4.99
Negative
5.29
Negative
5.17
Negative
Market Momentum
<0.01
Negative
55.31
Neutral
84.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNIT, the sentiment is Neutral. The current price of 4.96 is above the 20-day moving average (MA) of 4.64, below the 50-day MA of 4.99, and below the 200-day MA of 5.17, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 55.31 is Neutral, neither overbought nor oversold. The STOCH value of 84.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UNIT.
Uniti Group Risk Analysis
Uniti Group disclosed 33 risk factors in its most recent earnings report. Uniti Group 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
Uniti Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $992.22M | 5.48 | 10.81% | ― | -5.60% | -17.86% | |
64 Neutral | $1.21B | 12.89 | -3.72% | 12.10% | 1.49% | ― | |
63 Neutral | $865.87M | 9.73 | 6.92% | 11.83% | 7.13% | 64.82% | |
62 Neutral | $1.16B | 10.91 | 4.62% | 4.38% | 3.70% | ― | |
60 Neutral | $1.31B | 15.74 | 6.01% | 13.78% | 73.74% | -34.10% | |
60 Neutral | $2.79B | 11.37 | 0.20% | 8519.74% | 6.07% | -14.95% | |
56 Neutral | $957.65M | 17.11 | 5.07% | 12.40% | -6.28% | -49.57% |
* Real Estate Sector Average
Performance Comparison
UNIT
Uniti Group
4.96
1.34
37.02%
CIM
Chimera Investment
12.34
0.60
5.11%
DX
Dynex Capital
12.19
1.52
14.25%
FOR
Forestar Group
20.01
-14.50
-42.02%
SAFE
Safehold
16.15
-2.27
-12.32%
FBRT
Franklin BSP Realty Trust
11.45
-0.17
-1.46%
Uniti Group Earnings Call Summary
Earnings Call Date:Feb 21, 2025
(Q4-2024)
| % Change Since: -8.49%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call highlights strong growth in key financial metrics, successful strategic initiatives such as accessing the ABS market, and optimistic future plans with positive free cash flow expectations. While there are some challenges in maintaining wireless bookings and potential hurdles in the AI inference phase, the overall sentiment is buoyed by strong execution and future growth prospects.Q4-2024 Updates
Positive Updates
Strong Overall Growth Metrics
Uniti's strategic recurring revenue, adjusted EBITDA, and consolidated bookings grew approximately 5%, 8%, and 27%, respectively.
Successful Access to ABS Market
Uniti became the first commercial fiber provider to access the ABS market, with a successful transaction at a blended coupon of less than 6.5%.
Positive Free Cash Flow Expected
Uniti's business plan is fully funded, and the company expects to generate positive free cash flow in 2025.
Accelerated Fiber Build Plan
Windstream expects to double the number of targeted homes passed with fiber in 2025 over 2024, reaching 2 million homes by the end of 2025, two years earlier than initially expected.
Increased Hyperscaler Demand
Hyperscaler bookings, which were small in 2023, now represent about 20% of full-year bookings, with demand expected to continue growing.
Improved Capital Structure
Uniti's cost of capital has improved significantly, with debt yielding around 7.5%, a 500 basis point improvement in two years.
Negative Updates
Flat Wireless Bookings
Despite expectations, wireless bookings in 2024 were flat compared to 2023, reflecting a muted market environment.
Potential Challenges in AI Inference Phase
Inference phase demands more distributed low latency high bandwidth connectivity, which may initially favor major metro markets over Tier 2 and 3 markets where Uniti operates.
Company Guidance
In the fourth quarter and full year 2024, Uniti demonstrated strong performance, achieving strategic recurring revenue growth of approximately 5%, adjusted EBITDA growth of 8%, and consolidated bookings growth of 27%. The company successfully accessed the ABS market, establishing a new financing tool for future growth. For 2025, Uniti expects to generate positive free cash flow and maintains a focus on mid-single-digit top-line growth and high single-digit adjusted EBITDA growth. The merger with Windstream is anticipated to close in the second half of the year, potentially as early as July. Uniti also plans to build fiber to 2 million homes by the end of 2025, two years ahead of schedule, with a long-term target of 3 to 3.5 million homes. The company forecasts 2025 revenues of $902 million for Uniti Leasing and $304 million for Uniti Fiber, with respective adjusted EBITDA of $872 million and $125 million. The projected full-year AFFO per diluted common share is between $1.40 and $1.47, representing a 6% increase from the prior year.Uniti Group Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Uniti Group Progresses Towards Merger with Windstream
Positive
May 1, 2025
Windstream Holdings II, LLC, a successor to Windstream Holdings, Inc., reported its financial results for the quarter ending March 31, 2025. The company highlighted a continued expansion of its fiber network, with 38,000 new premises constructed, increasing fiber coverage to 38% in its Kinetic markets. Fiber subscriber growth was robust, with a 16% year-over-year increase, and fiber penetration reached 28%. The company also reported a 20% year-over-year growth in fiber subscriber revenue. Additionally, Windstream completed a sale of IPv4 assets for over $25 million and achieved an adjusted EBITDAR of $370 million, up $40 million sequentially. The company is progressing towards a planned merger with Uniti Group, expected to close in the early second half of 2025.
Spark’s Take on UNIT Stock
According to Spark, TipRanks’ AI Analyst, UNIT is a Neutral.
Uniti Group’s overall stock score reflects mixed financial performance with strong revenue growth but ongoing profitability and balance sheet challenges. The technical analysis suggests bearish trends, while the valuation appears attractive with a high dividend yield. The positive earnings call highlights strategic growth and future prospects, offering optimism despite existing financial concerns.
To see Spark’s full report on UNIT stock, click here.
Executive/Board ChangesBusiness Operations and Strategy
Uniti Group Approves New Equity Grant Agreements
Neutral
Apr 17, 2025
On April 16, 2025, Uniti Group‘s Board approved new grant agreements for restricted shares and stock unit awards under its 2015 Equity Incentive Plan, aligning terms for vesting upon retirement, death, disability, and changes in control. Additionally, Harold Zeitz was nominated for election to the Board, bringing extensive industry experience, while Jennifer Banner will not seek re-election after a decade of service.
Spark’s Take on UNIT Stock
According to Spark, TipRanks’ AI Analyst, UNIT is a Neutral.
Uniti Group’s overall stock score of 65 reflects a balance of strengths and weaknesses. The company’s robust revenue growth, operational efficiency, and attractive dividend yield are offset by its financial instability due to high liabilities and negative equity. Technical indicators point to a neutral to slightly bearish sentiment in the market. The earnings call provided a positive outlook with strategic initiatives and growth plans, contributing positively to the score.
To see Spark’s full report on UNIT stock, click here.
Private Placements and FinancingM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Uniti Group Reports Strong 2024 Financial Results and Merger Plans
Positive
Feb 21, 2025
Uniti Group Inc. announced its fourth quarter and full year 2024 financial results, highlighting a net income of $93.4 million for the full year and a significant revenue boost from its fiber and leasing segments. The company also completed a notable ABS financing transaction to strengthen its balance sheet and reduce debt costs, setting the stage for its anticipated merger with Windstream in the second half of 2025. This merger is expected to enhance Uniti’s positioning in the communications industry by leveraging synergies and expanding its fiber infrastructure capabilities.
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.