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    Conference Call Replay // U.S. Cable: It’s Time to Factor in Higher Margins

    We’ve spent the better part of a year pounding the table on cable stocks. Margin expansion has been at the center of our thesis. As video subscribership falls, we’ve argued, margins should reflexively expand. That’s not just because broadband has much higher gross margins than video. It’s also because video declines drive faster broadband ARPU growth, and because broadband consumes much less customer service and repair and maintenance expense than video.

    Despite having made the argument for higher margins again and again over the past year, however, we haven’t fully factored higher margins into our models and target prices. Until now.

    In a clients-only conference call on October 8th, Craig made the case for higher estimates and higher target prices for all of the cable operators in our coverage.

    Replay: Click here

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