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Altice USA Inc Class A ATUS

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Morningstar’s Analysis

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CEO Comments Crush Altice USA Shares; Valuation Offers Upside Potential

Analyst Note

| Michael Hodel, CFA |

Altice USA shares have dropped nearly 25% following comments late last week from CEO Dexter Goei that the firm will unexpectedly lose broadband customers during the third quarter. Goei also indicated the firm is rethinking its capital allocation strategy, including share repurchases and fiber network investments. This news comes on the heels of the resignation of Hakim Boubazine, COO of the firm’s core cable business, and the assumption of his responsibilities by Goei. This isn’t the first challenge at Altice--the firm faced execution issues in 2019, as it struggled to bring its wireless offering to market and misjudged the impact of marketing promotions, and it has lagged cable peers throughout the coronavirus pandemic.

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Company Profile

Business Description

Altice Europe acquired privately held U.S. cable company Suddenlink in 2015 and Cablevision in 2016. Suddenlink’s networks provide television, Internet access, and phone services to roughly 3.5 million U.S. homes and businesses located primarily in smaller markets, with major clusters in Texas, West Virginia, Idaho, Arizona, and Louisiana. Cablevision provides comparable services to about 5.5 million homes and business in the New York City metro area. Altice Europe spun off Altice USA, which includes both the Suddenlink and Cablevision operations, to shareholders in 2018. Altice USA also owns News 12 Networks, which broadcasts local 24-hour news networks in New York, i24News, a news operation focused on the Middle East and Israel, and Cheddar, a news upstart.

Contact
1 Court Square West, Long Island City
New York, NY, 11101
T +1 516 803-2300
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 8,900