CABO

CABO looks catastrophic on the headline — a $356M net loss, -23.7% net margin, -24.9% ROE and a $63.21 diluted loss per share. But the operating loss is only $207M while operating cash flow was still a robust $563M, so the bulk of the GAAP loss is a non-cash writedown, not cash burn. Net of $285M capex, the business threw off roughly $278M of free cash flow in FY2025 — essentially the entire $277M market cap in a single year, at a 0.2x price/sales. On a pure cash-flow-vs-price basis this is one of the cheapest equities you'll see, which is why it's a hold rather than an outright sell despite the ugly income statement.

The reason it isn't a buy is that this is a structurally declining, heavily leveraged business, and the equity is the thin slice on top. Revenue has fallen every year since the FY2022 peak of $1.71B to $1.50B (-4.9% YoY), and the MD&A is candid about why: a little under 60% of the footprint is already overbuilt by wired competitors at 100 Mbps+, 5G fixed-wireless is taking residential data share, and residential video — 12.5% of revenue — is in secular decline against Netflix/YouTube TV with programming costs running 59-63% of video revenue. Against that top-line erosion sits $3.21B of long-term debt versus just $1.43B of equity (liabilities/equity 2.90x) and only $153M of cash. The FCF is real, but it is largely spoken for by debt service and deleveraging.