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Altice USA Inc – All Other Telecommunications
Altice USA is one of the largest broadband communications and video services providers in the United States, delivering broadband, video, mobile, proprietary content and advertising services to more than 5 million residential and business customers across 21 states through its Optimum and Suddenlink brands. The company operates a4, an advanced advertising and data business, which provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. Altice USA also offers hyper-local, national, international and business news through its News 12, Cheddar and i24NEWS networks.
Analysis Results
Intrinsic Value $112.11
Latest Price $10.95
Relative Value 90% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -5.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -5.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 2.31 2.21
2023 2.18 1.99
2024 2.05 1.8
2025 1.94 1.62
2026 1.83 1.46
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 54.8 billion. This corresponds to a present value of 41.9 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.08 billion. Adding in the terminal value gives a total present value of 51.0 billion.

There are presently 455.0 million outstanding shares, so the intrinsic value per share is 112.11.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 789,634,000
Current Cash 195,711,000
Current Liabilities 2,735,119,000
Current Debt 917,313,000
Non-Cash Working Capital (NCWC) -1,223,883,000
Change in NCWC -69,637,000
EBIT 2,541,803,000
Tax Provision 294,975,000
Depreciation and Amortization 1,787,152,000
Capital Expenditure -1,231,715,000
Unlevered Free Cash Flow 2,453,466,909
Current Assets 976,566,000
Current Cash 278,422,000
Current Liabilities 3,098,103,000
Current Debt 1,245,713,000
Non-Cash Working Capital (NCWC) -1,154,246,000
Change in NCWC -25,907,000
EBIT 2,206,362,000
Tax Provision 139,748,000
Depreciation and Amortization 2,083,365,000
Capital Expenditure -1,073,955,000
Unlevered Free Cash Flow 2,661,194,899
Current Assets 1,381,356,000
Current Cash 701,898,000
Current Liabilities 1,978,479,000
Current Debt 170,682,000
Non-Cash Working Capital (NCWC) -1,128,339,000
Change in NCWC 129,754,000
EBIT 1,896,789,000
Tax Provision 47,190,000
Depreciation and Amortization 2,263,144,000
Capital Expenditure -1,355,350,000
Unlevered Free Cash Flow 2,456,006,688
Current Assets 903,254,000
Current Cash 298,781,000
Current Liabilities 2,021,191,000
Current Debt 158,625,000
Non-Cash Working Capital (NCWC) -1,258,093,000
Change in NCWC 61,302,000
EBIT 1,710,078,000
Tax Provision -38,655,000
Depreciation and Amortization 2,382,339,000
Capital Expenditure -1,154,173,000
Unlevered Free Cash Flow 2,999,546,000

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