Altice USA: 2021 Outlook Cut Again; Shares Near All-Time Low
(Preview) Company Update (ATUS US) (Neutral)
Summary
ATUS has again cut its 2021 outlook, and now expects broadband subscriber net losses for both Q4 and the full year.
ATUS expects to see a low-single-digit decline in revenues and a mid-single-digit decline in EBITDA in 2022, and there will be no buybacks.
Broadband losses are mainly in markets where ATUS overlaps with Verizon's Fios, but there will be more such fiber overbuild in the future.
Turnaround initiatives are unlikely to produce tangible progress until H2 2022, if at all, though there has been some operational improvement.
ATUS has a double-digit Free Cash Flow Yield, but its business challenges mean that its investment case is too speculative. Avoid.
Introduction
Altice USA, Inc. shares have fallen another 6.4% in the last two days (December 7-8). At $15.86, ATUS stock is now down 59% from its peak in May, and is close to its all-time low of $15.20 in October 2018.
We attribute ATUS' decline this week to CEO Dexter Goei's comments at the UBS Global TMT Conference on Tuesday…