Cable One, Inc.

CABO Details

Cable One, Inc. (NYSE: CABO) is a telecommunications company operating in 24 Western, Midwestern, and Southern states. Its Sparklight and Clearwave brands provide integrated data, video, and voice services. It offered broadband services to roughly 1.144 million household and commercial clients out of over 2.7 million residences passed, and Gigabit (GB) data services to about 98% of its residences passed as of September 30, 2021. Its operating segments are 1) Residential Data, 2) Residential Video, and 3) Business Services.

Latest News:

• Quarterly Dividend: On November 19, 2021, CABO's Board announced the quarterly dividend of USD 2.75 per share payable on December 17, 2021, to shareholders of record on November 30, 2021.

Q3FY21 Results:

• Double-Digit Growth in Topline: The company reported YoY growth of 26.93% in total revenue to USD 430.24 million in Q3FY21 (ended September 30, 2021) compared to USD 338.96 million in Q3FY20, due to a 26.02% growth in the Residential Data segment.
• Decline in Net Income: Net income for Q3FY21 decreased 21.17% YoY and stood at USD 52.26 million compared to USD 66.29 million in Q3FY20.
• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents of USD 489.54 million and total debt of USD 3.86 billion.

Key Risks:

• Geographical Concentration: The majority of CABO's customers are concentrated in the Mississippi Gulf Coast region and the larger Boise, Idaho area. As a result, any economic downturn in these areas could harm its operations.
• Dependence on Third-Party Suppliers: CABO is dependent on a limited number of third-party suppliers and licensors for hardware and software required to offer its services. Any contractual failure by these third parties could adversely impact its operations.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CABO Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

CABO's share price has declined 20.31% in the past twelve months and is currently leaning towards the lower-band of the 52-week range of USD 1,674.35 to USD 2,326.80. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 38.59. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 2,081.71.

Considering the correction in the stock price in the past twelve months, strong profitability margins, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 1,708.585, up 0.51% as of December 14, 2021, 2:56 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.