Cable One (CABO) experienced a significant stock plummet of 6.25% during Monday's trading session, following JP Morgan analyst Sebastiano C Petti's decision to lower the price target on the company from $420 to $325, while maintaining a Neutral rating.
Petti cited the growing fiber competition and ongoing fixed wireless access (FWA) challenges as primary factors expected to constrain Cable One's broadband subscriber growth and limit its long-term market penetration. With roughly 10% of Cable One's footprint now facing new fiber competition and fiber build-out accelerating, the analyst expressed concerns about the company's ability to positively impact broadband subscriber growth through its latest market strategy.
For 2025, Petti estimates Cable One's broadband net adds to decline to +5k, down from the previous estimate of +14k. Additionally, the analyst forecasts a 3% decrease in EBITDA to $820 million, driven by lower broadband revenue and rising costs. However, Petti anticipates Cable One's EBITDA decline rate to improve in 2025 as broadband revenues stabilize, led by improved average revenue per user (ARPU) and selling, general & administrative (SG&A) savings.
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