– Cable broadband provider – overbuilder that piggybacks on the existing networks to install additional cable network that is a little faster and costs a little less to subscribers.
– Excessive correction in stock price presents an attractive entry point.
– Broadband operators as a group are, for the first time in history, losing broadband subscribers as of Q2/22 due to competitive pressure from Fixed Wireless Access and Fiber-to-the-Home technologies that are taking market share.
– However, WOW is quite insulated from competitive threats because FWA and fiber do not have a big presence in WOW markets.
– Trades at decade-low valuations of 5x ’22 EBITDA.
– More normalized levels are expected at 7-8x.
– In a takeout scenario worth 8-9x or $20/share.
– DCF delivers $18+/share target
Exp. gain: 100% to $20/share.
Full WOW write-up (free guest account required):