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…