Investment Thesis
Cable One faces structural headwinds with declining revenues (-4.9% YoY) in a mature industry disrupted by streaming, while maintaining elevated leverage (2.11x D/E) and weak capital returns (2.4% ROE, 0.6% ROA). Although operational margins are solid at 24.5% and free cash flow remains positive, tight interest coverage (2.9x) and substantial capex requirements ($68.4M annually) leave limited financial flexibility if revenue deterioration accelerates.
Strengths
- Strong operating margin of 24.5% demonstrates operational efficiency
- Positive free cash flow generation of $49.8M with 14.1% FCF margin
- Adequate liquidity with current ratio of 1.75x and quick ratio of 1.72x
Risks
- Revenue decline of 4.9% YoY indicating structural industry headwinds and cord-cutting pressure
- High financial leverage at 2.11x Debt/Equity ratio with $3.1B long-term debt limiting financial flexibility
- Tight interest coverage ratio of 2.9x leaves minimal buffer for operational deterioration
- Weak returns on equity (2.4%) and assets (0.6%) despite positive cash flow indicate poor capital allocation
Key Metrics to Watch
- Revenue trajectory and subscriber churn rates
- Interest coverage ratio and debt paydown progress
- Free cash flow sustainability relative to capex requirements
- Operating margin compression risk in declining revenue environment
Financial Metrics
Revenue
353.0M
Net Income
35.8M
EPS (Diluted)
$6.12
Free Cash Flow
49.8M
Total Assets
5.5B
Cash
165.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
24.5%
Net Margin
10.1%
ROE
2.4%
ROA
0.6%
FCF Margin
14.1%
Balance Sheet & Liquidity
Current Ratio
1.75x
Quick Ratio
1.72x
Debt/Equity
2.11x
Debt/Assets
73.3%
Interest Coverage
2.86x
Long-term Debt
3.1B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T17:10:59.823066 |
Data as of: 2026-03-31 |
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