Breaking Down Cable One, Inc. (CABO) Financial Health: Key Insights for Investors

You're looking at Cable One, Inc. (CABO) right now and seeing a real mixed bag-the kind of financial picture that makes seasoned analysts pause, but also presents a clear opportunity if you know where to look. The headline from their Q3 2025 earnings is a classic tale of operational pressure masked by financial engineering: total revenue hit $376.0 million, a miss against estimates and a 4.5% year-over-year decline, which is a direct signal of the competition biting into their core business.

But here's the quick math on why the stock didn't crater: net income soared to $86.5 million, a massive 95.7% jump, but honestly, that was largely driven by a $67.4 million gain from selling equity investments, a one-time event that doesn't fix the underlying subscriber attrition. Still, the company is defintely focused on the balance sheet, having paid down nearly $200 million of its approximately $3.3 billion total debt in the quarter.

The real risk is in the details: they lost 149,100 residential data subscribers year-over-year, which is the engine of their future, but their Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin stayed strong at 53.7%. This tells us they are managing costs exceptionally well even as their top line shrinks. You need to understand if that margin strength is sustainable or if the subscriber bleed will finally overwhelm their cost controls. That's the core decision we need to unpack.

Revenue Analysis

If you're looking at Cable One, Inc. (CABO), the direct takeaway on revenue is this: the business is successfully pivoting to data but the transition is still a headwind. Total revenue for the third quarter of 2025 was $376.0 million, a clear year-over-year (YoY) decline of 4.5%. This slowdown is a reality check for investors who were hoping for a quick return to growth.

The core of the issue is a strategic shift away from legacy products, which is defintely the right long-term move, but it hurts the top line now. Analysts project the full-year 2025 revenue (Trailing Twelve Months, or TTM) to be around $1.54 billion, reflecting the ongoing pressure.

Breakdown of Primary Revenue Sources

Cable One's revenue streams are heavily weighted toward data services, which is where the future growth lies. The residential high-speed internet business is the powerhouse, but it's not immune to competition. Here's a quick look at the Q3 2025 performance:

• Residential Data: The largest segment, generating $227.6 million.
• Business Data: A smaller but growing segment at $57.5 million.
• Residential Video/Voice/Other: The legacy segments, which are shrinking rapidly.

Here's the quick math on contribution to the Q3 2025 total revenue of $376.0 million:

Near-Term Risks and Opportunities

The most significant change in the revenue mix is the steep decline in residential video. This segment drove a reduction of $8.7 million, or 16.2%, year-over-year in Q3 2025, as the company navigates the 'final phases of its video product lifecycle'. You can't stop the cord-cutting trend, so this decline is expected, but it creates a revenue gap that the data business must fill.

The Residential Data segment, your main focus, saw a 1.2% year-over-year revenue decrease in Q3 2025. This drop is due to subscriber churn (a 5.1% decline), even though the Average Revenue Per Unit (ARPU) rose by 3.2%. That's the core tension: losing customers but charging the remaining ones more. Still, the Business Data segment is a bright spot, growing 0.4% YoY in Q3 2025, driven by fiber and carrier services.

For a deeper dive into how these financials map to valuation, check out Breaking Down Cable One, Inc. (CABO) Financial Health: Key Insights for Investors. Your action item now is to track the Residential Data subscriber numbers and ARPU growth in Q4 2025. If ARPU growth can't outpace subscriber loss, the data revenue will continue to stall.

Profitability Metrics

You're looking at Cable One, Inc. (CABO) and seeing some wild swings in the bottom line. Honestly, the core takeaway is this: the company's operational efficiency remains elite for the sector, but non-cash charges are crushing the reported net income. You need to look past the headline net loss to the Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to see the true operating engine.

For the third quarter of 2025, Cable One, Inc. reported an Operating Margin of 25.2%. This is a solid figure, but it was down from 28% in the same quarter last year, a contraction that shows expenses are growing faster than revenue. The real story in operational profitability, however, is the Adjusted EBITDA Margin, which stood at a robust 53.7% in Q3 2025.

Operating vs. Net Profit Margins: A Tale of Two Metrics

The difference between the high operating metrics and the net income is stark. Net Profit Margin shows you the final profit after all costs, including taxes, interest, and non-cash items like depreciation and impairment. Here's a quick look at the volatility in 2025:

• Q1 2025 Net Profit Margin: 0.7%
• Q2 2025 Net Profit Margin: (114.9%)

That massive Q2 loss was due to a significant, non-cash impairment charge of over $437 million related to a decline in the company's stock price and a required assessment. What this estimate hides is that the core business was still generating strong cash flow. The full fiscal year 2025 is expected to post a negative net margin of around -29.78%.

Benchmarking Against the Telecom Industry

Cable One, Inc.'s operational efficiency stands out when compared to the broader telecommunications industry. The company's high margins reflect its focus on high-speed data services in smaller, less competitive markets, which historically allows for better pricing power.

The 53.7% Adjusted EBITDA Margin is defintely a premium, sitting well above the industry average of 34% to 38% for large integrated operators. This suggests excellent cost control in the core business, but the negative net margin shows that the company is struggling with non-operational costs and asset values.

Analysis of Operational Efficiency and Cost Management

The company is actively managing its cost base, even as it invests for the future. Operating expenses decreased in Q3 2025, driven largely by a reduction in programming costs as residential video subscribers continue to churn. This is smart cost management, moving away from a declining, high-cost segment.

Still, Selling, General, and Administrative (SG&A) expenses rose to 26.8% of revenues in Q3 2025, up from 22.5% in the prior year quarter. This increase is due to investments in growth enablement platforms, which are expected to generate meaningful OpEx and SG&A savings over time through greater automation. They are using AI-powered tools, like 'Ask Tommy,' to automate workflows and better allocate highly trained technicians to complex needs, which is a clear move toward long-term efficiency.

Your action item is to track the Adjusted EBITDA Margin and the SG&A-to-Revenue ratio. If the SG&A investment doesn't start translating into OpEx savings and stabilize the Operating Margin above the 25% level in the next few quarters, the efficiency argument weakens. For more context on their long-term strategy, you can review their Mission Statement, Vision, & Core Values of Cable One, Inc. (CABO).

Debt vs. Equity Structure

You need to know how a company finances its growth, because that tells you exactly how much risk you're taking on as an investor. For Cable One, Inc. (CABO), the picture is clear: they are a capital-intensive business, and they lean heavily on debt to fund their expansive network and operations. This is not unusual in the telecommunications sector, but the degree of leverage is what demands your attention.

As of June 30, 2025, Cable One's total debt stood at approximately $3.50 billion, which is a significant figure against their equity base. Here's the quick math on their financial structure, using their Q2 2025 balance sheet data:

• Total Debt (June 2025): $3.49 billion
• Equity Capital and Reserves (June 2025): $1.43 billion

This debt figure includes both long-term and short-term obligations, with a substantial portion of their total liabilities-around $3.66 billion-due beyond the next 12 months.

Leverage and Industry Comparison

The core metric here is the debt-to-equity (D/E) ratio, which measures a company's financial leverage by comparing its total liabilities to its shareholders' equity. For Cable One, the calculated D/E ratio, using the June 2025 figures, sits around 2.44 ($3.49B / $1.43B). This means for every dollar of equity, the company has about $2.44 in debt. To be fair, capital-intensive industries like telecommunications naturally carry higher D/E ratios than, say, a software company.

Still, a D/E ratio of 2.44 is high, especially when you compare it to the 'Broadcasting' industry average, which is closer to 1.23. The high leverage is a key reason why S&P Global Ratings downgraded the company's issuer credit rating to 'BB-' from 'BB' in May 2025, maintaining a negative outlook. The ratings agency noted that competition is negatively impacting earnings, keeping leverage elevated.

The company does have a large majority of its debt, over $2.7 billion of the $3.3 billion total, fixed or swap fixed at underlying base interest rates substantially below current market rates, which is defintely a saving grace in a high-rate environment. Their weighted average cost of debt was a manageable 3.9% in the first half of 2025.

The Shift to Debt Reduction

Cable One has made a conscious, actionable pivot toward debt reduction in 2025. They are focusing on disciplined debt repayment to reduce their leverage and prepare the balance sheet for future events, like the potential acquisition of the remaining stake in Mega Broadband Investments Intermediate I.

This focus is tangible. They suspended their quarterly cash dividend in Q1 2025, which frees up about $67 million annually for accelerated debt repayment. Plus, they've been actively paying down debt:

• Repaid over $313 million of outstanding debt through September 30, 2025.
• This includes nearly $200 million paid down in Q3 2025 alone, largely from revolving credit facility paydowns.

The company's strategy is currently to use operating cash flow and asset monetization to chip away at the debt. This debt-focused capital allocation strategy is a clear signal to the market that managing leverage is their top priority right now. You can learn more about their long-term strategic goals in the Mission Statement, Vision, & Core Values of Cable One, Inc. (CABO).

Liquidity and Solvency

You need to know if Cable One, Inc. (CABO) can cover its near-term obligations, and the quick answer is that while the traditional ratios look concerning, their actual liquidity is much stronger because of their access to credit. For a capital-intensive telecom, you have to look beyond the basic balance sheet metrics.

Let's start with the classic liquidity positions-the current and quick ratios. As of the most recent quarter, Cable One, Inc.'s (CABO) Current Ratio sits at approximately 0.38, and the Quick Ratio is even lower at about 0.31. Honestly, a ratio below 1.0 is a red flag in most industries because it means current liabilities (debts due within a year) exceed current assets (assets convertible to cash within a year). This is defintely a low number.

This low current ratio points directly to a negative working capital position. Working capital is current assets minus current liabilities, so a ratio of 0.38 means for every dollar of short-term debt, the company only has about 38 cents in short-term assets to pay it. This is typical for a cable company that collects revenue upfront or quickly, but has significant long-term debt and capital expenditure (CapEx) needs. It's a structural issue, not a sudden crisis, but it still means the company relies heavily on its cash flow and external financing to manage day-to-day operations.

The cash flow statement, however, tells a more complete story about their ability to generate cash. Over the trailing twelve months (TTM) leading up to Q3 2025, Cable One, Inc. (CABO) generated strong Cash Flow from Operating Activities of approximately $585.41 million. Here's the quick math on where that cash went:

• Operating Cash Flow (TTM): $585.41 million
• Investing Cash Flow (TTM): -$400.87 million (mostly CapEx for network upgrades)
• Financing Cash Flow (Q3 2025 highlight): Paid down $197.9 million in debt during Q3 alone

The company is using its operating cash to fund its significant CapEx and, crucially, to reduce debt. This disciplined debt repayment is a key strategic focus for management, as they paid down $313.2 million in total debt during the first nine months of 2025.

So, what are the potential liquidity concerns and strengths? The main concern is the high leverage and the thin cushion shown by the low current ratio. But the strength is the access to capital. As of September 30, 2025, Cable One, Inc. (CABO) reported having approximately $1.2 billion of committed excess liquidity available under its $1.25 billion revolving credit facility (Revolver). That's a huge safety net. Plus, they ended the quarter with about $167 million in cash and equivalents on hand. The business model generates a lot of cash, which is why the low current ratio isn't a death knell. Still, any sustained drop in operating cash flow would force them to draw on that Revolver much faster.

If you want to understand the long-term vision behind these numbers, check out the Mission Statement, Vision, & Core Values of Cable One, Inc. (CABO).

Your next step: Finance should model a stress test showing the impact on the Revolver if operating cash flow drops by 15% over the next four quarters.

Valuation Analysis

You're looking at Cable One, Inc. (CABO) and asking the million-dollar question: Overvalued or Undervalued? Based on the November 2025 data, the stock appears significantly undervalued on a book value basis, but its negative trailing Price-to-Earnings (P/E) ratio signals deep profitability concerns. The market's verdict is a mixed bag, but the stock's recent price action suggests a clear lack of confidence.

Is Cable One, Inc. (CABO) Overvalued or Undervalued?

The short answer is: it looks cheap on assets, but the earnings picture is messy. The trailing P/E ratio sits at a negative -1.32 as of mid-November 2025. Here's the quick math: negative earnings per share (EPS) mean the company is losing money, so a traditional P/E ratio is almost meaningless for valuation, but it's a huge red flag on the income statement. Still, the forward P/E, which uses analyst estimates for future earnings, is a much more palatable 4.16, suggesting an expected earnings recovery.

What this estimate hides is the company's underlying asset value and debt load. The Price-to-Book (P/B) ratio is a low 0.42, which theoretically means the stock is trading for less than half its book value per share. That's defintely a value signal. But you must look at the Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which is a better measure for capital-intensive companies like Cable One, Inc. It stands at a healthy 5.01, which is often considered a reasonable multiple in the telecom space, suggesting the enterprise value isn't wildly inflated relative to its operating cash flow (EBITDA).

• Trailing P/E: -1.32 (Signals current losses)
• Price-to-Book (P/B): 0.42 (Suggests asset-based undervaluation)
• EV/EBITDA: 5.01 (Looks reasonable for a cable operator)

Stock Performance and Analyst Sentiment

The stock price trend over the last 12 months is brutal. Cable One, Inc. shares have decreased by an alarming 73.56%, trading near their 52-week low of $105.26. For context, the stock closed around $107.73 on November 14, 2025. The 52-week high was near $436.99, showing just how sharp the decline has been as the market digests recent earnings misses and a challenging operating environment. That's a massive drop in value.

The analyst consensus reflects this uncertainty. The average rating is a cautious 'Reduce,' with two firms rating it a 'Sell' and five a 'Hold.' The 12-month price targets are all over the map, ranging from a low of $107.00 to a high of $421.00, with a consensus average target of approximately $256.75 across seven firms. The wide range tells you analysts are struggling to model the future cash flows, so you need to do your own deeper dive. Exploring Cable One, Inc. (CABO) Investor Profile: Who's Buying and Why? is a good next step.

Dividend and Payout Health

One of the few bright spots is the dividend. Cable One, Inc. has a forward dividend yield of a chunky 10.98%, based on an annualized dividend of $11.80 per share. This yield is significantly higher than the sector average, which is often a sign of either a deep value opportunity or a market that expects a dividend cut. Still, the forward payout ratio is a manageable 27.81%, which suggests the dividend is currently covered by expected future earnings, not necessarily trailing earnings.

Here's a quick look at the key metrics:

The core action for you is to map out the sustainability of that dividend against the company's debt and capital expenditure plans. If the dividend is safe, the stock is a deep value play; if not, the price has further to fall.

Risk Factors

You need to see the risks clearly before making a move on Cable One, Inc. (CABO), and honestly, the near-term picture is tough. The core challenge is a perfect storm of external competition and internal financial strain, which is directly translating into customer losses and revenue pressure in the 2025 fiscal year.

The biggest external risk is the relentless march of competition, primarily from fiber overbuilders and Fixed Wireless Access (FWA) providers. Cable One, Inc. (CABO) operates mostly in secondary and tertiary markets, but even there, fiber overlap has increased to a significant 53% as of the second quarter of 2025. This intense competition is why residential data customers declined by 13,000 in Q2 2025 and another 21,600 in Q3 2025, pushing total customers down 3.2% to 1,060,500 by mid-year. That's a serious headwind.

Financial and Operational Headwinds

The financial results for 2025 show the strain. Total revenues for Q3 2025 were $376 million, a 4.5% year-over-year decline. The company also took a massive non-cash asset impairment charge of $456.2 million (net of tax) in Q2 2025, resulting in a GAAP net loss of $438.0 million. Here's the quick math: that impairment charge alone is nearly the size of their quarterly revenue. Plus, they are carrying a substantial debt balance of $3.50 billion as of June 30, 2025, with a net leverage ratio of 3.9x as of September 30, 2025, which is high for this environment.

What this estimate hides is the operational friction. The company cited higher churn in Q3 2025 due to a combination of macroeconomic factors, competitive pressure, and disruptions from a major billing system migration. To be fair, product launches haven't been a silver bullet either; the new FlexConnect offering, aimed at value-conscious customers, didn't meet expectations for new connections.

• External Competition: Fiber and FWA are eating market share.
• Subscriber Loss: Residential data customers are falling sharply.
• Debt Load: $3.50 billion debt balance creates financial rigidity.
• Leadership Transition: CEO Julia Laulis's upcoming retirement adds uncertainty.

Mitigation Strategies and Clear Actions

Management is defintely not sitting still; they are executing a multi-year plan focused on stabilizing the business and driving long-term broadband revenue growth. The most concrete actions are financial and strategic:

First, they suspended the quarterly dividend, reallocating approximately $67 million annually to debt repayment and organic growth initiatives. This is a tough but necessary capital allocation move. Second, they are prioritizing cost-effective DOCSIS 4.0 upgrades to enable 10Gbps speeds, which is smarter than an expensive, full Fiber-to-the-Premises (FTTP) overbuild in their markets. Third, they are attacking churn with a new customer segmentation strategy, AI-driven retention efforts, and new value-enhancing products like Internet Lift and a mobile pilot program launched internally in October 2025. The mobile service is a direct attempt to reduce churn and increase customer lifetime value.

If you want to dive deeper into who is betting on this turnaround, you should check out Exploring Cable One, Inc. (CABO) Investor Profile: Who's Buying and Why?

The company's ability to execute on these new products and generate the expected cost savings from the billing system migration in late 2025 will be the key to offsetting the continued revenue decline in residential video and data.

Growth Opportunities

You're looking at Cable One, Inc. (CABO) and seeing a challenging near-term, but the company's future growth prospects hinge on a clear, capital-efficient strategy. The immediate takeaway is this: while residential subscriber losses are a headwind, the shift to higher-value products and disciplined debt reduction provides a runway for future profitability.

The company is defintely repositioning itself by prioritizing network upgrades and new product rollouts over expensive, large-scale fiber overbuilds. This focus on cost-effective DOCSIS 4.0 upgrades, which can deliver speeds up to 10Gbps, is a strategic competitive advantage, especially in their smaller and mid-sized markets. This pragmatic approach allows Cable One to compete on speed without the massive capital expenditure (CapEx) of a full Fiber-to-the-Premises (FTTP) deployment.

Here's the quick math on the near-term reality: residential data subscribers declined by 5.1% year-over-year in the third quarter of 2025, but this was partially offset by a 3.2% increase in average revenue per user (ARPU) from customers moving to higher-tier plans. Management expects residential broadband revenue to be flat or modestly declining for the full 2025 fiscal year, which is a sober, realist outlook. Still, the business data segment continues to show slight growth, up 0.4% year-over-year in Q3 2025.

• FlexConnect: Offers faster speeds and unlimited data for value-conscious customers.
• Internet Lift: Provides incremental revenue opportunities by targeting specific customer needs.
• Mobile Pilot: Launched internally in October 2025, with market rollout planned for November 2025, to reduce customer churn.
• Tech Assist: A $10 per month value-added service to boost ARPU.

The company is also laying the groundwork for operational efficiency. Investments in growth enablement platforms and a billing system migration are expected to generate annual run-rate cost savings of approximately $15 million over time. Plus, they are showing disciplined capital management, repaying nearly $200 million of debt in Q3 2025 alone.

A key strategic opportunity is the potential acquisition of the remaining 55% interest in Mega Broadband Investments (MBI). Cable One has an option to call this interest starting in Q3 2025, though the transaction is now expected no earlier than October 1, 2026. This full ownership would increase the company's scale and bring a complementary network, but you must factor in the execution risk and the assumption of MBI's debt obligations. For a deeper dive into who is betting on this future, check out Exploring Cable One, Inc. (CABO) Investor Profile: Who's Buying and Why?

What this estimate hides is the impact of competition from fiber and fixed wireless access (FWA) providers, which is driving the subscriber losses. The market is consolidating, and Cable One's ability to maintain a strong Adjusted EBITDA margin-which was 53.7% in Q3 2025-is a testament to their operating model, but it will be tested. Analysts forecast full-year 2025 Earnings Per Share (EPS) to be positive $32.31, a significant turnaround from the negative $81.43 forecast earlier in the year, assuming the cost-saving and ARPU-driving initiatives take hold. The action here is to watch the mobile pilot's impact on churn in Q4 2025 and Q1 2026.