JP Morgan analyst Sebastiano C Petti lowered price forecast for Cable One, Inc. CABO from $420 to $325, while maintaining a Neutral rating.

The analyst anticipates the growing fiber competition and ongoing fixed wireless access (FWA) challenges to constrain the company’s broadband subscriber growth and limit long-term market penetration.

With roughly 10% of Cable One’s footprint now facing new fiber competition and fiber build-out accelerating, it remains to be seen if the company’s latest market strategy can positively impact broadband subscriber growth, adds the analyst.

For 2025, Petti estimates broadband net adds of +5k (down from +14k) and lower EBITDA 3% to $820 million due to lower broadband revenue and rising costs.

Notably, the analyst anticipates the company’s EBITDA decline rate to improve in 2025 as broadband revenues stabilize (vs. -5.5% y/y drop in FY24), led by improved average revenue per user (ARPU) and selling, general & administrative (SG&A) savings.

Notably, Petti expects the company’s new go-to-market strategy and emphasis on increasing gross adds will lead to a slight rise in SG&A expenses in 2025.

The analyst sees total revenue of $1.540 billion (down 0.8%) and margins of 53.2% (-80bps year over year) for 2025.  

Last month, the company reported fourth-quarter GAAP EPS of $(18.71), which includes a fair value adjustment and non-cash impairment, while sales of $387.21 million missed the estimate of $389.56 million.

Price Action: CABO shares are down 2.03% at $254.91 at the last check Monday.

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