Remote Work, IoT, And Stock Repurchases Make Cable One A Buy

(14min)

Summary

  • Cable One is undervalued at 1.32x FWD cash flow, with strong free cash flow and ongoing stock repurchases supporting a Buy rating.
  • Deployment of DOCSIS 4.0, fiber investments, and growth in remote work and IoT are expected to drive user and revenue growth.
  • Recent declines in contract termination costs and potential U.S. tax cuts could act as catalysts for stock price appreciation.
  • Despite notable debt, CABO's risk is mitigated by prudent financial management and hedging, while industry growth supports long-term upside.

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Cable One, Inc. (NYSE:CABO) could receive more demand for its services after the deployment of the DOCSIS 4.0 along with the emergence of remote work and the IoT industry. Besides, in my opinion, the recent decrease in contract termination costs

This article was written by

Based in Europe, I am an independent investor with more than a decade of experience. I research cash flow statements and unlevered free cash flow figures. My articles may include a number of assumptions about the future free cash flow of companies. Many of those assumptions are based on previous financial figures reported, and my own forecasts about the future of the of the business model. My financial models could also include different financial figures including cost of capital, cost of debt, WACC, share count, net debt and other information. I will try to write about companies that reported financial figures for a long time. Hence, I usually do not write about growth stocks. With regards to trading multiples, I usually study EV/FCF, net income, and EV/EBITDA. I want to be part of this community because Seeking Alpha offers beneficial information to investors, readers, and analysts. I am here to learn from others, and from the market.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CABO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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