Altice USA Inc (ATUS, Financial), a prominent player in the telecommunication services industry, has experienced a significant fluctuation in its stock performance recently. With a market capitalization of $1.24 billion, the company's current stock price stands at $2.71. Over the past week, Altice USA has seen a notable decline of 12.46%, yet when zooming out to the past three months, the stock tells a different story, boasting a 22.07% gain. This recent surge contrasts with the company's GF Value, which is currently at $8.65, down from $10.36 three months ago. Despite the increase in stock price, the GF Valuation remains labeled as a "Possible Value Trap, Think Twice," a caution that has persisted from the previous quarter.
Company Overview
Altice USA Inc, formed through the acquisitions of Suddenlink in 2015 and Cablevision in 2016 by Altice Europe, provides television, internet access, and phone services. The company operates primarily in smaller markets across the United States, with significant customer bases in Texas, West Virginia, Idaho, Arizona, and Louisiana. Following its spin-off from Altice Europe in 2018, Altice USA now serves approximately 9 million homes and businesses under the Optimum brand name and owns News 12 Networks and i24News. 
Profitability Analysis
Altice USA's Profitability Rank stands at a robust 7/10, indicating a strong position within the industry. The company's Operating Margin is an impressive 20.75%, outperforming 79.63% of its peers. While the ROE is listed at an extraordinary 10000.00%, this figure suggests a potential data anomaly or an extraordinary event that may not be sustainable. The ROA at 0.16% and ROIC at 3.91% also indicate the company's ability to generate profits relative to its assets and invested capital, respectively. Over the past decade, Altice USA has maintained profitability for 7 years, showcasing its resilience and operational efficiency. 
Growth Prospects
Altice USA's Growth Rank is a solid 6/10, reflecting a balanced growth trajectory. The company's 3-Year and 5-Year Revenue Growth Rates per Share are 6.20% and 10.70%, respectively, indicating consistent revenue expansion over time. However, the estimated Total Revenue Growth Rate for the next 3 to 5 years is projected at -2.61%, which, while lower than the industry average, still outperforms 7.77% of its competitors. The EPS without NRI has seen a decline over the past three years at -31.30%, but the 5-Year Growth Rate is positive at 13.40%. Looking ahead, the EPS Growth Rate is expected to skyrocket to 63.76% over the next 3 to 5 years, surpassing 95.24% of the industry. These figures suggest that while Altice USA has faced challenges, it also has significant growth potential. 
Investor Confidence
Notable investors have taken positions in Altice USA, signaling confidence in the company's prospects. PRIMECAP Management (Trades, Portfolio) holds 5,285,000 shares, representing a 1.16% stake. Seth Klarman (Trades, Portfolio) owns 4,774,615 shares, accounting for 1.05% of the company, while Jim Simons (Trades, Portfolio) has invested in 2,878,800 shares, making up 0.63%. These holdings by prominent investors may reflect a belief in the company's value and future performance.
Competitive Landscape
When compared to its competitors, Altice USA's market capitalization places it in a competitive position within the telecommunication services industry. Shenandoah Telecommunications Co (SHEN, Financial) has a market cap of $935.062 million, Gogo Inc (GOGO, Financial) is valued at $1.15 billion, and Liberty Latin America Ltd (LILA, Financial) stands at $1.31 billion. Altice USA's market cap of $1.24 billion situates it squarely among these peers, suggesting a fierce competition for market share.
Conclusion
In summary, Altice USA Inc's stock performance has been a mixed bag, with a recent downturn overshadowed by a significant three-month rally. The company's valuation remains a point of caution, as indicated by the GF Value. Altice USA's profitability metrics, particularly its Operating Margin and ROIC, are strong, but its ROE requires careful scrutiny. Growth prospects show potential, especially in the long-term EPS estimates. The confidence of major holders and the company's competitive market cap relative to its peers round out a complex but intriguing investment picture. Investors should weigh these factors carefully when considering Altice USA as part of their portfolio.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
