Company Reports

We will discontinue analyst coverage of Optimum on or about July 7.

We will discontinue analyst coverage of Optimum on or about July 7.

Optimum Communications announced a complex restructuring to shield certain assets from creditors and force creditors to negotiate a debt restructuring. The firm created a new entity that has raised more than $500 million, most of which will be used to buy Optimum shares at $2.50 each.

Customer losses at Optimum continued to worsen during the first quarter, with the number of residential customers served declining 6% year over year. Solid growth at Lightpath, the firm's enterprise services subsidiary, and higher ad revenue limited the revenue decrease to 4%.

Optimum (formerly Altice USA) is on the razor's edge. Our discounted-cash flow valuation and a variety of other methodologies, such as value per location passed or per customer, point to figures that are roughly equivalent to the size of the firm's debt load. In addition, the company faces a wall of debt maturities in early 2027. As a result, pinpointing what, if any, value will be left for shareholders is nearly impossible. Our Uncertainty Rating is Extreme as a result.

Optimum (formerly Altice USA) is on the razor's edge. Our discounted-cash-flow valuation and a variety of other methodologies, such as value per location passed or per customer, point to figures that are roughly equivalent to the size of the firm's debt load. As a result, pinpointing what, if anything, will be left for shareholders is nearly impossible. We are moving our Uncertainty Rating to Extreme as a result.

Customer losses continued to worsen at Optimum during the fourth quarter, with 67,000 net losses the worst on record. On the positive side, revenue declined only 2%—far better than the 4%-5% slide over the first three quarters. Cost discipline drove a 7% increase in EBITDA versus the prior year.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the incursion of new fiber network competition and fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with poor results. A new management team has slowly been improving the firm's performance, but Altice USA's very large debt load calls for much faster progress than we've seen recently.

Altice USA reported weak customer metrics, while revenue and EBITDA declined 5% and 3%, respectively. Margins improved year over year for the first time since 2023. Management reiterated its aggressive 2025 EBITDA target and declined to discuss the firm's capital structure.

Altice USA again showed modest operating improvement in its second quarter, losing fewer net broadband customers (35,000) than in the prior quarter (37,000) despite seasonal weakness. Revenue continued to decline at a steady pace, down 4% year over year, pulling EBITDA down 7%.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the incursion of new fiber network competition and fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with lackluster results. A new management team has slowly been improving the firm's performance, but Altice USA's very large debt load calls for faster progress than we've seen recently.

Altice USA lost 37,000 net broadband customers during the first quarter, continuing a trend of modest improvement. Without the benefit of political ad sales, the decline in total revenue accelerated to 4.4% year over year from 2.9% in the previous quarter. EBITDA declined nearly 6% from a year ago.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the incursion of new fiber network competition and fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with lackluster results. A new management team has slowly been improving the firm's performance, but Altice USA's very large debt load calls for faster progress than we've seen recently.

Altice USA lost 39,000 net broadband customers during the fourth quarter, a modest improvement versus the prior two quarters. Strong political ad sales partially offset continued declines in the core business, with total revenue down 2.9% year over year. Profitability remains under pressure.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the incursion of new fiber network competition and fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with lackluster results. A new management team has slowly been improving the firm's performance, but Altice USA's very large debt load calls for faster progress than we've seen recently.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the broader incursion of fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with lackluster results. A new management team, largely hailing from Comcast, has slowly been improving the firm's performance. We expect the firm’s networks will remain vital pieces of infrastructure that will generate strong, albeit slow-growing, cash flow over the long term. However, Altice USA's very large debt load leaves little room for error.

Altice USA lost 50,000 net broadband customers during the third quarter, showing no improvement from recent trends. Despite strong political advertising, revenue declined 3.9% year over year, the worst drop in over a year. Management also provided medium-term forecasts for the first time.

Altice USA has struggled to retain customers recently—more than cable peers Comcast and Charter—as it battles stiff competition from Verizon in the New York market and faces the broader incursion of fixed-wireless players into the broadband business. The firm has also taken a different approach to the business in recent years than other cable operators, with lackluster results. A new management team, largely hailing from Comcast, has slowly been improving the firm's performance. We expect the firm’s networks will remain vital pieces of infrastructure that will generate strong, albeit slow-growing, cash flow over the long term. However, Altice USA's very large debt load leaves little room for error.

Altice USA reported disappointing second-quarter results. We've trimmed our expectations for 2024 while leaving our longer-term forecast largely unchanged, cutting our fair value estimate to $5 from $7. We reiterate that the firm's extremely high debt load leaves little room for error and that small changes in our assumptions yield big swings in our fair value estimate.

Altice USA continues to show improvement in an environment where growth has slowed and fixed-wireless broadband continues to take incremental market share, though at a slower pace. Similar to its cable peers, we’ve trimmed our growth expectations for Altice, particularly around the small business market, reducing our fair value estimate to $7 from $9. We suspect Altice has opportunities to improve its financial position and deliver value for shareholders, but it remains in a challenging situation that creates very high uncertainty. We continue to caution investors that the firm’s extremely high debt load leaves little room for error and that small changes in our assumptions can yield big swings in our fair value estimate.