Cable One, Inc. (CABO) | Investment Case

1. Company Snapshot

1.a. Company Description

Cable One, Inc., together with its subsidiaries, provides data, video, and voice services in the United States.The company offers residential data services, a service to enhance Wi-Fi signal throughout the home.It also provides residential video services, such as local networks; local community programming that includes governmental and public access; and other channels, as well as digital video services, including national and regional cable networks, music channels, and an interactive and electronic programming guide with parental controls.

In addition, the company offers premium channels that offer movies, original programming, live sporting events, and concerts and other features; and advanced video services, such as whole-home DVRs and high-definition set-top boxes, as well as TV Everywhere product, which enables its video customers to stream various channels and shows to mobile devices and computers.Further, it provides residential voice services comprising local and long-distance calling, voicemail, call waiting, three-way calling, caller ID, anonymous call rejection, and other features, as well as international calling by the minute services.Additionally, the company offers data, voice, and video products to business customers, including small to mid-markets, enterprises, and wholesale and carrier customers.

As of December 31, 2021, it served approximately 1.2 million residential and business customers in 24 states through its Sparklight, Fidelity, and Clearwave brands.Cable One, Inc.was incorporated in 1980 and is headquartered in Phoenix, Arizona.

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1.b. Last Insights on CABO

Cable One's recent performance was negatively impacted by a decline in residential data revenues, primarily due to a decrease in residential data subscribers and average revenue per unit (ARPU) resulting from targeted pricing and product offerings in certain markets. The company's failure to meet earnings expectations by nearly $8 and subsequent suspension of its dividend further exacerbated the situation.

1.c. Company Highlights

Last Price	127.29
Change Percentage	3.08%
Open	124.49
Previous Close	123.49
Market Cap ( Millions)	717
Volume	109793
Year High	428.14
Year Low	96.67
M A 50	143.07
M A 200	175.41

FCF Yield	41.74%
Dividend Yield	2.32%
ROE	-25.02%
Debt / Equity	229.13%
Net Debt / EBIDTA	-9003.94%
Price To Book	0.5
Price Earnings Ratio	-1.81
Price To FCF	2.4
Price To sales	0.47
EV / EBITDA	-110.78

2. Cable One's Q3 2025 Earnings: Weaker Subscriber Results

Cable One's financial performance in the third quarter of 2025 was marked by a decline in total revenues to $376 million, down from $393.6 million in the same period last year. The company's adjusted EBITDA was $201.9 million, representing 53.7% of revenues. However, the earnings per share (EPS) came out at $5.17, significantly lower than the estimated $9.25. Operating expenses were $96 million or 25.5% of revenues, compared to $104.6 million or 26.6% of revenues in the third quarter of last year.

Publication Date: Nov -25

                                    📋 Highlights
                                    Subscriber Decline::
                                                Residential data customers fell by 21,600 in Q3 2025 due to churn from macroeconomic factors, competition, and billing migration.
Revenue Drop::
                                                Total revenues declined to $376 million in Q3 2025, down from $393.6 million in the same period in 2024.
Debt Reduction::
                                                The company paid down $200 million of debt in Q3 2025, totaling over $313 million in debt retirements for the year.
Mobile Launch::
                                                Unlimited mobile plans starting at $25 per line launched in November 2025, aiming to reduce churn and boost customer lifetime value.
Churn Improvement::
                                                October 2025 saw sequential churn improvements, with connects exceeding 2024 levels and disconnects returning to pre-Q3 levels.

                                

Subscriber Results and Churn

The company's subscriber results in the third quarter were weaker than expected, with residential data customers declining by 21,600. The decline was driven by higher churn from macroeconomic factors, competitive pressures, promotional roll-offs, and billing migration activities. However, the company saw modest improvements in third-quarter connects as compared to the prior year period, a trend that carried into October. Churn improved in October, in line with October 2024 results, indicating that the company's aggressive approach to addressing churn is yielding positive results.

Revenue and Pricing Strategy

The company's average revenue per user (ARPU) increased primarily driven by segmented pricing changes and a higher-than-usual level of promotional expiration. The company expects some of its retention initiatives to put downward pressure on ARPU, partially offset by the continued adoption of value-enhancing products and services, resulting in stable ARPU through the balance of the year. The launch of a new go-to-market pricing structure across its MSO footprint is expected to simplify pricing and allow Sparklight representatives to match products and price points to individual needs.

Valuation and Outlook

Given the current valuation metrics, with a P/E Ratio of -1.5, P/B Ratio of 0.41, and EV/EBITDA of -107.18, it appears that the market has already priced in the company's challenges. Analysts estimate next year's revenue growth at -4.4%, indicating a continued decline in revenues. The company's focus on executing initiatives that both strengthen connects and reduce churn, as well as its upcoming mobile pilot, will be crucial in determining its future performance.

Operational Highlights

The company's mobile initiative is underway, with unlimited plans starting at $25 per line in select markets later this month. The company believes that mobile will help reduce churn, deepen the adoption of its services, and increase customer lifetime value. Additionally, the company's focus on customer segmentation, with its Lift product positioned as value by need resonating with cost-conscious customers, is expected to drive connect levels higher.

3. NewsRoom

Advisors Asset Management Inc. Acquires 3,771 Shares of Cable One, Inc. $CABO

Dec -01

Source: defenseworld.net

Cable One, Inc. (NYSE:CABO) Receives $256.75 Average PT from Brokerages

Nov -18

Source: defenseworld.net

Here's What Key Metrics Tell Us About Cable One (CABO) Q3 Earnings

Nov -07

Source: zacks.com

Cable One, Inc. (CABO) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

Cable One Reports Third Quarter 2025 Results

Nov -06

Source: businesswire.com

Spire Wealth Management Has $113,000 Stock Holdings in Cable One, Inc. $CABO

Nov -06

Source: defenseworld.net

Cable One, Inc. (NYSE:CABO) Receives $279.25 Average PT from Analysts

Oct -24

Source: defenseworld.net

Cable One to Host Conference Call to Discuss Third Quarter 2025 Results

Oct -23

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.21%)

6. Segments

Residential - Data

Expected Growth: 8.23%

Cable One's 8.23% residential growth driven by increasing demand for high-speed internet, bundling strategies, and expansion into new markets. Additionally, investments in network upgrades and customer service improvements have enhanced the customer experience, leading to increased customer retention and acquisition.

Business Services

Expected Growth: 7.4%

Cable One's Business Services segment growth of 7.4% is driven by increasing demand for high-speed data and voice services from small and medium-sized businesses, as well as large enterprises. Additionally, the company's fiber-optic network expansion and strategic acquisitions have enhanced its service offerings, leading to higher revenue growth.

Residential - Video

Expected Growth: 3.37%

The 3.37% growth in Residential - Video from Cable One, Inc. is driven by increasing demand for high-speed internet and video streaming services, fueled by the rise of online content providers such as Netflix and Hulu. Additionally, Cable One's strategic investments in network upgrades and customer service improvements have contributed to the growth.

Other

Expected Growth: 7.4%

Cable One, Inc.'s 7.4% growth is driven by increasing demand for high-speed data and video services, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on providing premium services, such as business and residential fiber-based solutions, contributes to its growth momentum.

Residential - Voice

Expected Growth: 4.83%

Cable One's Residential - Voice segment growth of 4.83% is driven by increasing demand for bundled services, expansion into new markets, and strategic pricing initiatives. Additionally, investments in network infrastructure and customer service improvements have enhanced the overall customer experience, leading to increased adoption and retention rates.

7. Detailed Products

Sparklight Internet

High-speed internet services for residential and business customers, offering speeds up to 1 Gbps

Sparklight TV

Digital TV services offering a range of channels, On Demand content, and streaming capabilities

Sparklight Phone

Voice over Internet Protocol (VoIP) phone services for residential and business customers

Business Internet

Dedicated internet services for businesses, offering high-speed connections and customized solutions

Business Phone

Customized phone solutions for businesses, including VoIP and SIP trunking services

Managed Wi-Fi

Secure and reliable Wi-Fi solutions for businesses, including network design and management

8. Cable One, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Cable One, Inc. faces moderate threat from substitutes due to the availability of alternative internet and TV services from competitors such as satellite TV providers and streaming services.

Bargaining Power Of Customers

Cable One, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's services are often bundled, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Cable One, Inc. relies on a few large suppliers for its network equipment and infrastructure. While the company has some bargaining power due to its size, suppliers still have some leverage to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the cable and internet services industry. New entrants would need to invest heavily in infrastructure and network development.

Intensity Of Rivalry

The cable and internet services industry is highly competitive, with several established players competing for market share. Cable One, Inc. faces intense rivalry from competitors such as Comcast and Charter Communications.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	66.12%
Debt Cost	5.95%
Equity Weight	33.88%
Equity Cost	7.92%
WACC	6.62%
Leverage	195.19%

11. Quality Control: Cable One, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

TDS

A-Score: 5.4/10

Value: 8.1

Growth: 3.2

Quality: 3.1

Yield: 4.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

Shentel

A-Score: 5.3/10

Value: 7.2

Growth: 5.1

Quality: 2.6

Yield: 6.0

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

ATN International

A-Score: 4.5/10

Value: 8.8

Growth: 4.6

Quality: 2.7

Yield: 7.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

Crexendo

A-Score: 4.4/10

Value: 1.7

Growth: 7.7

Quality: 7.0

Yield: 0.0

Momentum: 7.0

Volatility: 3.0

1-Year Total Return ->

Cable One

A-Score: 3.6/10

Value: 7.6

Growth: 4.1

Quality: 2.8

Yield: 5.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

Consolidated Communications Holdings

A-Score: 3.2/10

Value: 7.2

Growth: 0.7

Quality: 1.1

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

1.02%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.62%

Cable One, Inc. - US12685J1051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CABO

1.c. Company Highlights

Weak Momentum

Better Quality

Average Yield

Earnings Miss

Revenues Miss

Average Growth

Average Quality

Higher Yield

Stable Momentum

Fairly Valued

Medium Volatility

Lower Quality

Revenues Beats

2. Cable One's Q3 2025 Earnings: Weaker Subscriber Results

Subscriber Results and Churn

Revenue and Pricing Strategy

Valuation and Outlook

Operational Highlights

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.21%)

6. Segments

Residential - Data

Expected Growth: 8.23%

Business Services

Expected Growth: 7.4%

Residential - Video

Expected Growth: 3.37%

Other

Expected Growth: 7.4%

Residential - Voice

Expected Growth: 4.83%

7. Detailed Products

Sparklight Internet

Sparklight TV

Sparklight Phone

Business Internet

Business Phone

Managed Wi-Fi

8. Cable One, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Cable One, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

127.29$

Current Price

127.29$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA