Altice USA Earnings: Continued Progress in a Challenging Environment for Growth

Altice USA's fourth-quarter results again showed incremental improvement, but the challenging broadband competitive environment offset some of these gains. After adjusting our model, we have trimmed our fair value estimate to $9 from $13. We like Altice's assets and believe the firm can steadily improve its operating performance in the coming years. But we continue to caution investors that its extremely high debt load leaves little room for error. Small changes in our assumptions can yield big swings in our fair value estimate. The firm's recent debt refinancing activity has pushed its next major maturity out to 2027, but at a high cost that raises the bar Altice must clear to deliver value for shareholders.