Altice USA: Now 70% Below Peak After More Bad News From Q4

Company Update (ATUS US) (Neutral)

Summary

• ATUS shares reached a new all-time low on Friday, after falling another 20% since Q4 results, and are now 70% below their peak last May.

• In Broadband, subscribers fell 2k in Q4, but revenues fell 1.7% sequentially. Group EBITDA was down a high-single-digit year-on-year.

• The core of ATUS' turnaround strategy is to roll out more fiber, but this may not actually help. Other initiatives will take until H2 or later.

• ATUS expects $100m more OpEx and $500m more CapEx in 2022; cashflows will be much worse, and leverage is too high at 5.4x.

• We believe the ATUS investment case is broken. Its problems are structural, and the risks to shareholders are too high. Avoid.

Introduction

Altice USA, Inc. shares closed at a new all-time low on Friday (February 18), falling 20% after Q4 2021 results released post-market on Wednesday.

We downgraded our rating on ATUS from Buy to Neutral in November 2021; since then ATUS shares have fallen 36.5% to 70% below their May peak.

We believe the ATUS investment cas…