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Cablevision Rides High on a Slew of Positives, Competition Rife

On Nov 13, we issued an updated research report on Cablevision Systems Corp.CVC - a leading cable multi service operator (MSO) in the U.S.

Cablevision reported disappointing financial results in the third quarter of 2015 with both the top and the bottom line lagging the Zacks Consensus Estimate.

The companyis consistently focusing on its WiFi network, referred to as the "Optimum WiFi Network", for future growth. It has already established more than 1.1 million WiFi hotspots in New York, New Jersey and in the Connecticut region. In 2015, the company intends to speed up the expansion of its WiFi networkby deploying access points in high-data usage areas.

Moreover, Cablevision recently unveiled an Internet package that bundles in a digital antenna for TV service. The new technology which combines high-speed broadband with an antenna to watch online broadcast networks is aimed at luring customers who prefer low-cost online streaming services over expensive bundled TV services.

The multi-channel video market in the U.S. is almost saturated. Roughly 87% of the total 114 million TV households in the U.S. are multi-channel TV subscribers. Furthermore, gaining customers from competitors is a difficult task as most pay-TV operators like Netlix Inc. NFLX and Amazon TV of Amazon.com Inc. AMZN offer innovative packages.However, Cablevision's decision to offer Hulu services can be seen as an attempt to tackle this threat. Notably, Cablevision is the first satellite TV operator to offer Hulu's on-demand services.

Meanwhile, Cablevision and Altice N.V. have entered into a definitive agreement pursuant to which Altice has agreed to acquire Cablevision. The deal is expected to deliver significant synergies for the company, going ahead. However, persistent video subscriber loss, stiff competition from satellite TV and Internet TV services by telecom operators like Verizon Communication's VZ Go90 and a highly leveraged balance sheet raise concerns.

Cablevision currently has a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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