Altice USA: Declines Slowed In Q4, New CEO Making Changes
(Preview) Company Update (ATUS US) (Neutral)
Summary
Altice USA stock lost another 3.7% on Thursday after releasing results overnight. The share price is down 64% in the past year.
Customer and revenue declines have slowed sequentially. The new CEO has brought in his own team and is changing the strategy.
Adjusted for share-based compensation, 2022 free cash flow was $358m, compared to a $1.91bn market capitalization.
However, net debt was $24.2bn and 6.3x EBITDA, and interest expense will rise by around $200m in 2023. EBITDA declines can continue.
Ultimately, we believe the investment case on Altice USA is too speculative and the outcome is too binary. Avoid.
Introduction
Altice USA, Inc. released Q4 2022 results after markets closed on Wednesday (February 22). ATUS shares closed down 3.7% the day after, which means they have lost 64% of their value in the past year. ATUS stock has lost 77% since we downgraded our rating to Hold, suggesting it should be avoided, in 2021.
Q4 2022 results showed ATUS has continued to lose customers and r…