LONG ISLAND CITY, NY—Altice USA, Inc. (NYSE:ATUS) recently reported significant stock sales by Patrick Drahi, a major shareholder and director of the company. According to a recent SEC filing, Drahi sold a total of 805,227 shares of Altice USA's Class A common stock on November 21, 2024. The shares were sold at prices ranging from $23.3164 to $25.6836, resulting in a total transaction value of approximately $19.7 million.
The sales were conducted through Next (LON:NXT) Alt S.a.r.l., an indirect holding company controlled by Drahi. Following these transactions, Drahi retains ownership of over 23.5 million shares in Altice USA. This activity comes as part of a broader financial strategy, as the shares were delivered in connection with the exercise and expiration of capped call transactions with a financial institution.
Altice USA, a prominent player in the cable and telecommunications industry, continues to be a focal point for investors, particularly with Drahi's substantial influence and ongoing involvement in the company's governance.
In other recent news, Altice-USA has been the subject of financial analysis by TD (TSX:TD) Cowen, which adjusted its price target for the company to $3.50 from $6.00, while maintaining a Buy rating. This followed Altice-USA's third-quarter 2024 performance, which showed strong growth in its fiber and mobile segments, and set new near-term targets including increased subscriber additions and reduced capital expenditures for 2025. The company also aims to achieve EBITDA margins around 40%, although the timeline remains unspecified.
Altice-USA reported Q3 revenue of $2.2 billion and adjusted EBITDA of $862 million, with 47,000 new fiber customers and 36,000 new mobile lines added. Despite a decline in total and residential revenue, the company saw a significant increase in mobile services revenue and maintains a strong liquidity position with no debt maturities until 2027. The company is committed to growing its fiber and mobile subscriber bases, aiming for over 1 million customers in each segment by 2026 and 2027, respectively.
However, TD Cowen's analysis indicates that the new targets set by Altice-USA appear to be within reach, but the reduced capital expenditures forecast is expected to lead to a slower rollout of fiber-to-the-home infrastructure. Furthermore, the lowered EBITDA suggests that any potential operational turnaround may start from a weaker financial position than previously anticipated. Despite these challenges, TD Cowen remains confident in Altice-USA's strategic direction due to its clear progress and achievable goals.
InvestingPro Insights
In light of Patrick Drahi's recent stock sales, investors may find additional context from Altice USA's financial metrics and market performance valuable. According to InvestingPro data, Altice USA's market capitalization stands at $1.2 billion, reflecting the company's current valuation in the telecommunications sector.
Despite recent challenges, InvestingPro Tips suggest that Altice USA's net income is expected to grow this year, and analysts predict the company will return to profitability. This outlook could provide some reassurance to investors concerned about the recent insider selling activity.
The company's stock has shown strong performance in the short term, with InvestingPro data indicating a 14.6% price return over the last month and an impressive 40% return over the last three months. This recent momentum may be of interest to investors analyzing the timing of Drahi's stock sales.
It's worth noting that Altice USA's valuation metrics present a mixed picture. While the company's P/E ratio (adjusted) for the last twelve months is exceptionally high at 7,737.2, an InvestingPro Tip highlights that the current valuation implies a strong free cash flow yield, which could be attractive to value-oriented investors.
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Altice USA, providing a deeper understanding of the company's financial health and market position.
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