Altice USA Inc (ATUS, Financial), a prominent player in the U.S. telecommunications sector, has recently witnessed a notable surge in its stock price. Over the past week, the company's shares have increased by 3.10%, and over the last three months, the stock has seen an impressive 27.32% gain. Currently, Altice USA boasts a market capitalization of $1.12 billion, with a stock price of $2.43. Despite these gains, the GF Value, which assesses the intrinsic value of a stock, suggests a valuation of $4.62. This is a significant drop from the past GF Value of $10.32, indicating a shift in the company's perceived value and leading to a consistent GF Valuation of "Possible Value Trap, Think Twice."
Overview of Altice USA Inc
Altice USA Inc operates primarily under the Optimum brand name, offering television, internet access, and phone services across the United States. The company expanded its reach by acquiring Suddenlink in 2015 and Cablevision in 2016, now serving millions of homes and businesses, especially in smaller markets and the New York City metro area. Altice USA was spun off from Altice Europe in 2018 and also manages News 12 Networks and i24News. 
Profitability Insights
Altice USA's financial health appears robust, with a Profitability Rank of 7/10. The company's Operating Margin stands at 20.73%, outperforming 78.25% of its peers in the industry. Although the Return on Equity (ROE) is unusually high at 10,000.00%, this could be influenced by specific financial maneuvers or accounting practices, and thus, should be approached with caution. The Return on Assets (ROA) at 0.02% and Return on Invested Capital (ROIC) at 4.38% provide a more grounded view of the company's efficiency in utilizing its assets and capital. 
Growth Trajectory
Altice USA's Growth Rank is currently at 5/10. The company has demonstrated a solid track record with a 3-Year Revenue Growth Rate per Share of 6.20% and an even stronger 5-Year Rate at 10.70%. However, future projections indicate a slight decline, with an estimated -1.40% Total Revenue Growth Rate over the next 3 to 5 years. Earnings per Share (EPS) growth has been mixed, with a 3-Year EPS Growth Rate at -31.30% but a more positive 5-Year Rate at 13.40%. The projected EPS Growth Rate for the next 3 to 5 years is slightly negative at -0.20%. 
Investor Holdings
Notable investors in Altice USA include PRIMECAP Management (Trades, Portfolio), holding 4,870,800 shares, and Seth Klarman (Trades, Portfolio) with 4,774,615 shares. Jim Simons also holds a significant stake with 3,294,200 shares. These investments reflect a continued interest from institutional investors despite the company's mixed financial signals.
Competitive Landscape
Altice USA operates in a competitive industry, with key players like Shenandoah Telecommunications Co (SHEN, Financial), Gogo Inc (GOGO, Financial), and Liberty Latin America Ltd (LILA, Financial) closely contesting the market. These companies have market caps of $968.484 million, $1.34 billion, and $1.69 billion, respectively, positioning them in direct competition with Altice USA in terms of size and market share.
Conclusion
In conclusion, Altice USA Inc's recent stock performance has been impressive, yet the underlying financial metrics and future growth projections suggest caution. The GF Value and consistent valuation as a possible value trap indicate that investors should think twice before making investment decisions. While the company shows strong profitability and has notable investors, the mixed growth outlook and competitive pressures could pose challenges ahead. Investors should weigh these factors carefully to make informed decisions in the dynamic telecommunications sector.
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.
