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1. Company Snapshot

1.a. Company Description

Uniti, an internally managed real estate investment trust, is engaged in the acquisition and construction of mission critical communications infrastructure, and is a leading provider of wireless infrastructure solutions for the communications industry.As of September 30, 2020, Uniti owns 6.7 million fiber strand miles and other communications real estate throughout the United States.

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1.b. Last Insights on UNIT

The recent 3-month performance of Uniti Group Inc. was negatively impacted by high debt and interest expenses, leading to a precarious financial health. The company's high debt burden has resulted in significant interest expenses, which have weighed on its profitability. Additionally, the suspension of dividends and uncertain future of payouts have underscored the company's financial instability.

1.c. Company Highlights

2. Uniti's Q3 2025 Earnings: A Strong Performance

Uniti reported a robust financial performance in Q3 2025, with revenues reaching $552 million, slightly above estimates. The company's adjusted EBITDA was $275 million, and EPS came in at $0.16, significantly beating estimates of -$0.18. The strong EPS performance was driven by the company's improving trends, including 13% fiber revenue growth and the highest number of fiber gross adds. The company's Fiber Infrastructure business saw sustained momentum, with consolidated pro forma bookings MRR of approximately $1.6 million.

Publication Date: Nov -20

📋 Highlights
  • Merged Fiber Footprint Growth:: Uniti merged with Windstream, creating a national wholesale fiber network with 80% of revenue from core fiber businesses, targeting 3.5 million homes passed and 1.25 million fiber subs by 2029.
  • HyperScaler Market Expansion:: Hyperscaler funnel grew 13% QoQ, with TAM for AI/hyperscalers 50% higher than initial estimates, driving high-margin deals like the zero-capital, high-margin Q3 hyperscaler contract.
  • 2025 Financial Outlook:: Projects $2.2B revenue and $1.1B adjusted EBITDA, with Kinetic and Fiber Infrastructure contributing $945M/$385M and $1.1B/$770M respectively, reflecting 13% fiber revenue growth.
  • Capital Structure Optimization:: Reduced debt yield by 450 bps over two years, with 5.5x–6x net leverage target and $3–4B Kinetic ABS capacity to fund $805M 2025 CapEx and fiber build plans.
  • MDU Strategic Focus:: Prioritizing multiple dwelling units (MDUs) for double-digit customer growth and higher IRRs than single-family markets, leveraging fresh leadership and proven build strategies.

Segment Performance

The company's Fiber Infrastructure business continues to drive growth, with 11% year-over-year growth in homes passed and 17% growth in fiber subs. The Kinetic segment also saw improvements, with the highest net adds in two years. Uniti's strategy involves building fiber into unique locations, providing operational excellence, and focusing on customer experience, which is expected to drive long-term growth.

Guidance and Outlook

Uniti updated its 2025 outlook, expecting consolidated revenue and adjusted EBITDA of $2.2 billion and $1.1 billion, respectively. The company is on track to reach 3.5 million homes and 1.25 million fiber subs by 2029. The company's hyperscaler funnel has grown approximately 13% since the second quarter, with numerous large deals getting booked. Uniti expects to maintain or improve its current trajectory, with a target of reaching 1.9 million homes passed with fiber by the end of the year.

Valuation and Leverage

The company's valuation metrics indicate a relatively attractive price. The P/S Ratio is 1.24, and the EV/EBITDA ratio is 8.27. However, the Net Debt / EBITDA ratio is 6.63, indicating a relatively high leverage. Uniti is focused on maintaining a healthy mix of ABS and non-ABS debt and expects to end the year with a combined net leverage of between 5.5x and 6x. Analysts estimate next year's revenue growth at 61.9%, which is expected to drive the company's financial performance.

Growth Opportunities

Uniti is exploring growth areas, including cross-selling Uniti Solutions products, increasing its market share in the waves market, and tapping into the opportunity with multiple dwelling units within its footprint. The company is also focused on driving ARPU higher by using the speed ladder, introducing value-added services, and using credits more effectively. With a strong outlook for the next 3 years, Uniti is well-positioned to capitalize on the growing demand for fiber infrastructure.

3. NewsRoom

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Uniti Group Inc. to Participate at the Raymond James 2025 TMT and Consumer Conference

Dec -02

Source: globenewswire.com

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Uniti Group Inc. (UNIT) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -02

Source: seekingalpha.com

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Uniti Group Remains One Of The Best Plays On AI

Dec -02

Source: seekingalpha.com

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Uniti Group: A Critical Piece Of The AI Value Chain

Dec -02

Source: seekingalpha.com

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Kinetic Surpasses Major Milestone in Broken Arrow: 25,000 Fiber Homes Passed

Nov -25

Source: globenewswire.com

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Bank of New York Mellon Corp Trims Stake in Uniti Group Inc. $UNIT

Nov -22

Source: defenseworld.net

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Uniti Group Inc. to Present at the BofA Securities 2025 Leveraged Finance Conference

Nov -18

Source: globenewswire.com

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First Pacific Advisors' Strategic Moves: Becton Dickinson & Co Takes Center Stage

Nov -13

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.76%)

6. Segments

Leasing

Expected Growth: 2.5%

Uniti Group Inc.'s leasing growth of 2.5% is driven by increasing demand for data centers and fiber infrastructure, fueled by 5G adoption, cloud computing, and IoT growth. Additionally, the company's strategic acquisitions and partnerships, such as the sale-leaseback agreement with Windstream, have expanded its portfolio and enhanced its growth prospects.

Fiber Infrastructure

Expected Growth: 3.5%

Uniti Group's Fiber Infrastructure growth is driven by increasing demand for high-speed data transmission, 5G network deployments, and rising need for network densification. Additionally, growing adoption of cloud services, IoT devices, and remote work arrangements fuel the need for reliable and high-capacity fiber connectivity, supporting a 3.5% growth rate.

7. Detailed Products

Fiber Infrastructure

Uniti Group Inc. provides dark fiber infrastructure to telecommunications companies, data centers, and other organizations, enabling them to build and operate their own high-speed networks.

Data Center Solutions

Uniti offers data center colocation and managed services, providing secure, reliable, and scalable infrastructure for customers' IT equipment and applications.

Ethernet Services

Uniti provides high-speed Ethernet services, including dedicated internet access, Ethernet transport, and wavelength services, for businesses and organizations.

IP Services

Uniti offers IP services, including IP transit, IP VPN, and IP peering, enabling customers to connect to the internet and exchange traffic with other networks.

Managed Services

Uniti provides managed services, including network monitoring, maintenance, and repair, to help customers manage their IT infrastructure and applications.

8. Uniti Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Uniti Group Inc. is medium, as the company operates in a niche market with limited alternatives. However, the increasing adoption of cloud-based services and virtualization may pose a threat to the company's traditional data center business.

Bargaining Power Of Customers

The bargaining power of customers is low, as Uniti Group Inc. provides specialized data center services to a diverse range of customers, making it difficult for customers to negotiate prices or switch to alternative providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium, as Uniti Group Inc. relies on a limited number of suppliers for its data center infrastructure and equipment. However, the company's scale and negotiating power help to mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low, as the data center market is highly capital-intensive and requires significant investment in infrastructure and technology. Additionally, regulatory barriers and high switching costs make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry is high, as the data center market is highly competitive, with several established players competing for market share. Uniti Group Inc. must differentiate itself through its service offerings and pricing strategies to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 181.77%
Debt Cost 10.96%
Equity Weight -81.77%
Equity Cost 10.96%
WACC 10.96%
Leverage -222.30%

11. Quality Control: Uniti Group Inc. passed 1 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

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Farmland Partners

A-Score: 7.0/10

Value: 5.6

Growth: 4.9

Quality: 8.8

Yield: 9.0

Momentum: 5.0

Volatility: 9.0

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Gladstone Land

A-Score: 6.1/10

Value: 3.8

Growth: 5.6

Quality: 5.1

Yield: 9.0

Momentum: 3.5

Volatility: 10.0

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Saul Centers

A-Score: 6.1/10

Value: 5.7

Growth: 3.6

Quality: 6.1

Yield: 10.0

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Volatility: 9.3

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AFC Gamma

A-Score: 5.7/10

Value: 8.3

Growth: 7.4

Quality: 5.4

Yield: 10.0

Momentum: 0.0

Volatility: 3.3

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A-Score: 4.9/10

Value: 6.1

Growth: 3.7

Quality: 4.3

Yield: 0.0

Momentum: 9.0

Volatility: 6.0

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Uniti

A-Score: 4.1/10

Value: 5.5

Growth: 4.6

Quality: 5.3

Yield: 5.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.39$

Current Price

6.39$

Potential

-0.00%

Expected Cash-Flows