Investment Thesis
Optimum Communications faces insolvency with negative stockholders' equity of -5.2B, indicating liabilities exceed assets by over 5B. The company posted -2.9B net loss on declining 2.1B revenue with -114.3% operating margin, while burning -137.4M in free cash flow annually. With 26.4B in long-term debt, sub-1.0x liquidity ratios, and structural headwinds in legacy pay-TV services, the equity has no recovery path.
Strengths
- Positive operating cash flow of 170.3M provides near-term liquidity runway
- Maintains 1.0B cash balance for operational flexibility
- Still generating 2.1B in annual revenue from established subscriber base
Risks
- Negative stockholders equity of -5.2B indicates technical insolvency and high bankruptcy risk
- Massive 2.9B net loss with -139.6% net margin shows structural unprofitability
- Negative free cash flow despite positive OCF indicates capex (307.7M) exceeds operating cash generation
- 26.4B long-term debt with -7.8x interest coverage ratio cannot be serviced from operations
- Current ratio of 0.85x below 1.0 signals liquidity crisis and refinancing risk
- Revenue declining 4.1% YoY in structurally declining cable TV industry
Key Metrics to Watch
- Liquidity runway and cash burn rate until cash exhaustion
- Operating cash flow sustainability as revenue continues decline
- Debt refinancing capacity and covenant compliance status
- Subscriber losses and churn rates in core cable business
- Capital structure restructuring or bankruptcy filing triggers
Financial Metrics
Revenue
2.1B
Net Income
-2.9B
EPS (Diluted)
$-6.10
Free Cash Flow
-137.4M
Total Assets
27.9B
Cash
1.0B
Profitability Ratios
Gross Margin
N/A
Operating Margin
-114.3%
Net Margin
-139.6%
ROE
N/A
ROA
-10.3%
FCF Margin
-6.7%
Balance Sheet & Liquidity
Current Ratio
0.85x
Quick Ratio
0.85x
Debt/Equity
N/A
Debt/Assets
118.6%
Interest Coverage
-7.78x
Long-term Debt
26.4B
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: 2026-05-09T12:19:47.700211 |
Data as of: 2026-03-31 |
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