Optimum Communications Inc Class A (15PA) AI Stock Analysis

Company Guidance

Management guided to a full‑year outlook of mid‑single‑digit revenue declines (Q2 revenue ~$2.0B, down 5.8% YoY or 5.1% ex‑divestiture) and low‑ to mid‑single‑digit adjusted EBITDA declines (Q2 adjusted EBITDA $786M, down 2.2% YoY; adj. EBITDA margin 38.8%, +140 bps), while highlighting record gross margin of 71% (+180 bps). They expect FY2026 capex of $1.2B–$1.5B (Q2 capex $320M, ~16% cap intensity) with Lightpath capex $200M–$300M, passings growth of ~150k–175k (Q2 totals: 10.1M passings, 3.2M fiber passings, +220k last 12 months) and higher H2 spend. Operational targets include broadband stabilization (Q2 broadband net loss 40k; ~4.0M broadband subs), continued mobile growth (Q2 +50k lines to 724k, mobile lines +33% YoY; convergence ARPU $79.80, +2.4% YoY), fiber customer growth (Q2 +20k to 749k, +13% YoY), and margin/cost improvements (OpEx ex‑SBC down ~5% YTD and ~4% in Q2, ~$30M y/y operating expense improvement, sales acquisition costs down ~10%, truck rolls/service calls down >20%, programming costs down >14%). On capital structure they reiterated no 2026 maturities (next material maturities begin in 2027), weighted average cost of debt 6.8%, weighted life 2.8 years, ~81% fixed rate, leverage ~8x last‑2‑quarters annualized EBITDA, and noted cash/restricted balances including ~$880M in restricted/UnSub silos, $90M at Lightpath and $300M used in the $300M tender repurchase (120M Class A at $2.50), with ~273M shares outstanding post‑tender.