Altice USA Inc. Class A (ATUS)

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1. Executive Summary

  • Company / Ticker: Altice USA Inc. Class A (ATUS)
  • Sector: U.S. Telecommunications and Cable Services
  • Investment Opinion: Neutral (Hold) — Analysts lean toward “Buy,” but weak financials and structural industry headwinds suggest caution.

2. Company Overview

  • Business Model: Provides broadband internet, pay TV, VoIP, and mobile services primarily under the Optimum brand across 21 U.S. states.
  • Market Position: 4th largest U.S. cable provider; spun off from Altice Europe.
  • Key Offerings: High-speed internet, cable TV, business telecom, local news (News12).
  • Management: CEO Dennis Mathew; CFO Marc Sirota; Patrick Drahi is the controlling shareholder.

3. Financial Analysis

  • Revenue & Profitability:
    • TTM revenue: ~$8.86B; Net loss: –$157M
    • FY2024 operating income: $1.68B; Net loss: –$103M
  • Valuation Ratios:
    • Forward P/E: ~7.6x
    • Price/Sales: 0.11x
    • Trailing P/E: ~36.7x
  • Dividend: None — last dividend issued in 2018 ($2.035 special dividend)

4. Stock Performance

  • Current Price: $2.05 (–4.2% recently)
  • 52-Week Range: $1.52 – $3.20
  • Volatility: Beta ≈ 1.6 → high volatility
  • Trend: Short-term downtrend; AI sentiment rated as “Strong Sell”

5. Valuation Analysis

  • Analyst Ratings:
    • StockAnalysis: Buy, Target ~$2.75 (+34%)
    • Chartmill: Avg. target $2.88 (23 analysts)
    • Seeking Alpha: 6 Buy, 6 Hold, 6 Sell — mixed sentiment
  • Takeaway: Upside exists based on targets, but fundamentals remain weak.

6. Industry & Market Analysis

  • Industry Trends: Saturation in U.S. broadband & cable; cord-cutting intensifies
  • Competitive Landscape: Faces pressure from Comcast, Charter, and fiber entrants
  • Macroeconomic Factors: Regulatory risks, consumer spending shifts, high debt load

7. Risk Analysis

  • Market Risk: Accelerated customer loss to streaming platforms
  • Financial Risk: High debt levels, negative net income
  • Operational Risk: Content disputes (e.g., MSG blackout)
  • Governance Risk: Ownership/control concerns around Patrick Drahi and litigation issues

8. Growth Catalysts

  • Fiber Expansion: FTTH rollout to increase high-speed broadband footprint
  • Product Bundling: Integration of Disney+/Hulu and streaming platforms
  • B2B Services: Growth in business and wholesale telecom

9. Analyst Sentiment

  • Consensus: Mostly Buy, but with mixed ratings — Neutral or Hold also common
  • Target Price Range: $2.75 – $2.88 → ~34–40% upside from current levels

10. Conclusion

Altice USA is attempting a turnaround via fiber upgrades and streaming bundles. While analyst targets imply upside, ongoing losses, high leverage, and industry disruption suggest a Hold is most appropriate. Watch for improved profitability and FTTH execution as potential buy signals.

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