Options Traders May Want to Skip Over This Broadband Stock

CABO is down 18% this year

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Cable One, Inc. (NYSE:CABO) is an American broadband communications provider. CABO serves more than 1.1 million residential and business customers in 24 states through Sparklight and the associated Cable One brands. Cable One provide residential customers and businesses with connectivity and entertainment services, including Gigabit speeds, advanced WiFi, and video. At last check the equity was trading flat at $1,698.42.

On Oct. 21, Cable One announced that the senior leadership team will be hosting a conference call to discuss its third-quarter earnings on Thursday, November 4. The broadband company will also issue a press release reporting its results after the markets close on Thursday. Analysts have Cable One’s earnings coming in at $12.64 per share for the upcoming Q3 earnings report.

Cable One stock has decreased about 12% year-over-year and has shed 27% since peaking at a record $2,326.80 last December. Additionally, shares of CABO have fallen 18% year-to-date and remain up just 1% from their May 52-week low of $1,674.35. Moreover, Cable One offers a forward dividend of $11.00 and a dividend yield of 0.64%.

From a fundamental point of view, Cable One stock’s valuation is still on the higher end, despite CABO’s price dropping significantly over the past year and currently hovering near its 52-week low. Cable One stock is beginning to reach a more reasonable value, with the broadband company producing consistent top and bottom-line growth over the past few years.  

However, Cable One has a relatively weak balance sheet, with $449 million in cash and $4.01 billion in total debt. In addition, CABO doesn’t offer the greatest price-sales ratio at 7.46, further adding to the argument that Cable One stock is overvalued. Overall, investors are likely better suited waiting for a better entry point.

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