Cable One Inc (CABO)

History and Background

Cable One Inc. (CABO) was founded in 1998 as a subsidiary of The Washington Post Company. It was spun off as an independent publicly traded company in 2015. The company has grown through organic expansion and strategic acquisitions.

Core Business Areas

• Residential Broadband: Provides high-speed internet access to residential customers.
• Business Services: Offers broadband, phone, and data services to small and medium-sized businesses.
• Residential Video: Offers traditional cable television services, although this segment is declining in importance.
• Advertising Sales: Sells advertising space to local businesses, targeting audiences in the areas served by Cable One.

Leadership and Structure

Julie Laulis is the President and CEO. The company has a traditional hierarchical structure with various departments reporting to the executive team and board of directors.

Key Offerings

• Residential Broadband: High-speed internet service marketed under the Sparklight brand. Market share varies significantly by geographic region. Competitors include Cox Communications, Charter Communications, Verizon, and AT&T. Revenue generation is the highest among the product offerings.
• Business Services: Broadband, phone, and cloud services for businesses. Market share is smaller than residential broadband, focused in the communities Cable One serves. Competitors include major telecommunications companies like Lumen, Verizon, and Comcast. There is growth potential for cloud service offerings.
• Residential Video: Traditional cable TV service. Market share is decreasing as more customers cut the cord. Competitors are traditional cable providers and streaming services like Netflix, Hulu, and YouTube TV. Declining revenue is observed in this segment.

Industry Overview

The broadband industry is characterized by increasing demand for high-speed internet and fierce competition between cable operators, telcos, and fixed wireless providers.

Positioning

Cable One focuses on smaller and mid-sized markets, often overlooked by larger providers. This allows them to build stronger customer relationships and focus on local needs. Competitive advantages stem from a high-speed internet network and customer service in select markets.

Total Addressable Market (TAM)

The US broadband market is estimated at over $100 billion. Cable One is focused on gaining market share within its existing footprint and expanding into adjacent markets.

Key Competitors

• CMCSA
• CHTR
• VZ
• LUMN
• DISH

Competitive Landscape

Cable One operates in a highly competitive industry. Larger competitors like Comcast and Charter have greater resources and broader geographic reach. Cable One differentiates itself by focusing on smaller markets and providing localized customer service. The emergence of fixed wireless technologies is a growing competitive threat.

Fidelity Communications

• Year: 2019
• Acquisition Price (USD millions): 525.8
• Strategic Rationale: Expansion of footprint and subscriber base in contiguous markets.

Historical Growth: Cable One has demonstrated consistent growth in revenue and subscribers over the past decade, primarily driven by its focus on high-speed internet.

Future Projections: Analysts predict continued growth in revenue and earnings, driven by increasing broadband penetration and rising ARPU. They estimate CABO revenue to grow to $1.8 billion in 2024. This reflects a blend of organic expansion and potential acquisitions.

Recent Initiatives: Recent initiatives include expanding its fiber optic network, launching new bundled services, and investing in customer service improvements.

Cable One is a broadband provider focusing on smaller markets. It demonstrates strength through high-speed internet service and solid financial performance. Competition from larger entities remains a challenge. Expansion in fiber optic networks and innovative offerings are vital to sustain the company's growth trajectory.

Data Sources:

• Company SEC Filings (10-K, 10-Q)
• Analyst Reports
• Industry Publications
• Company Website

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Market data is subject to change. Please conduct your own due diligence before making any investment decisions.