Altice USA Posts Weak Q3 Results; Fair Value Estimate to $19

Altice USA continued to struggle during the third quarter, reporting poor customer losses, weak revenue per customer, and soft margins. On the brighter side, the firm’s network upgrade effort has accelerated nicely, and management indicated that it has seen signs of a turnaround thus far during the fourth quarter. New CEO Dennis Mathew stated he’s taking a hard look at marketing, pricing, and customer service. We suspect his operating experience at Comcast will serve Altice well, but the stock’s investment prospects will likely be tied to M&A decisions in the near term. Former CEO and current chairman Dexter Goei indicated that the board is very close to a decision on the sale of all or part of the former Suddenlink territory, which accounts for about 30% of revenue, and is potentially interested in taking the firm private.