Intrinsic value of Altice USA Cl A - ATUS

Previous Close

$21.30

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$21.30

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of ATUS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  
Warning: Division by zero in /home3/webhub/public_html/x-fin.com/stocks/a-inc/tbl-cashflow.php on line 20
-100.00
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  6,017
  6,198
  6,396
  6,612
  6,846
  7,099
  7,370
  7,660
  7,970
  8,300
  8,650
  9,022
  9,417
  9,835
  10,276
  10,743
  11,236
  11,756
  12,305
  12,883
  13,492
  14,134
  14,810
  15,521
  16,270
  17,057
  17,886
  18,757
  19,673
  20,636
  21,648
Variable operating expenses, $m
 
  5,808
  5,968
  6,143
  6,332
  6,536
  6,755
  6,990
  7,240
  7,507
  7,790
  7,292
  7,610
  7,948
  8,305
  8,682
  9,080
  9,501
  9,944
  10,412
  10,904
  11,423
  11,969
  12,544
  13,149
  13,785
  14,455
  15,159
  15,899
  16,677
  17,495
Fixed operating expenses, $m
 
  26
  26
  27
  28
  28
  29
  30
  30
  31
  32
  33
  34
  34
  35
  36
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  48
  49
  50
  51
  52
Total operating expenses, $m
  5,685
  5,834
  5,994
  6,170
  6,360
  6,564
  6,784
  7,020
  7,270
  7,538
  7,822
  7,325
  7,644
  7,982
  8,340
  8,718
  9,117
  9,539
  9,983
  10,452
  10,945
  11,465
  12,012
  12,588
  13,194
  13,831
  14,503
  15,208
  15,949
  16,728
  17,547
Operating income, $m
  332
  364
  401
  442
  486
  534
  586
  640
  699
  762
  828
  1,698
  1,773
  1,852
  1,936
  2,025
  2,118
  2,217
  2,322
  2,432
  2,547
  2,670
  2,798
  2,933
  3,076
  3,226
  3,384
  3,550
  3,724
  3,908
  4,101
EBITDA, $m
  2,032
  2,501
  2,581
  2,668
  2,763
  2,865
  2,975
  3,093
  3,218
  3,352
  3,494
  3,645
  3,805
  3,974
  4,154
  4,343
  4,543
  4,754
  4,977
  5,212
  5,459
  5,720
  5,994
  6,283
  6,587
  6,907
  7,243
  7,597
  7,970
  8,361
  8,772
Interest expense (income), $m
  1,092
  2,075
  2,027
  2,122
  2,225
  2,337
  2,458
  2,588
  2,727
  2,876
  3,034
  3,202
  3,380
  3,569
  3,769
  3,980
  4,204
  4,440
  4,689
  4,952
  5,229
  5,521
  5,828
  6,152
  6,492
  6,851
  7,228
  7,625
  8,042
  8,481
  8,942
Earnings before tax, $m
  -1,091
  -1,711
  -1,625
  -1,680
  -1,739
  -1,803
  -1,873
  -1,948
  -2,028
  -2,114
  -2,205
  -1,503
  -1,607
  -1,717
  -1,833
  -1,956
  -2,085
  -2,223
  -2,368
  -2,520
  -2,681
  -2,851
  -3,030
  -3,218
  -3,416
  -3,625
  -3,844
  -4,075
  -4,318
  -4,573
  -4,841
Tax expense, $m
  -260
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -832
  -1,711
  -1,625
  -1,680
  -1,739
  -1,803
  -1,873
  -1,948
  -2,028
  -2,114
  -2,205
  -1,503
  -1,607
  -1,717
  -1,833
  -1,956
  -2,085
  -2,223
  -2,368
  -2,520
  -2,681
  -2,851
  -3,030
  -3,218
  -3,416
  -3,625
  -3,844
  -4,075
  -4,318
  -4,573
  -4,841

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,228
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  36,474
  36,243
  37,403
  38,667
  40,036
  41,513
  43,098
  44,795
  46,606
  48,535
  50,586
  52,762
  55,069
  57,512
  60,095
  62,825
  65,707
  68,749
  71,957
  75,339
  78,903
  82,656
  86,608
  90,768
  95,145
  99,751
  104,595
  109,690
  115,047
  120,678
  126,599
Adjusted assets (=assets-cash), $m
  35,246
  36,243
  37,403
  38,667
  40,036
  41,513
  43,098
  44,795
  46,606
  48,535
  50,586
  52,762
  55,069
  57,512
  60,095
  62,825
  65,707
  68,749
  71,957
  75,339
  78,903
  82,656
  86,608
  90,768
  95,145
  99,751
  104,595
  109,690
  115,047
  120,678
  126,599
Revenue / Adjusted assets
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
Average production assets, $m
  12,986
  13,374
  13,802
  14,269
  14,774
  15,319
  15,904
  16,530
  17,199
  17,910
  18,667
  19,470
  20,322
  21,223
  22,176
  23,184
  24,247
  25,370
  26,554
  27,802
  29,117
  30,502
  31,960
  33,495
  35,110
  36,810
  38,597
  40,477
  42,454
  44,533
  46,717
Working capital, $m
  -2,000
  -1,673
  -1,727
  -1,785
  -1,848
  -1,917
  -1,990
  -2,068
  -2,152
  -2,241
  -2,336
  -2,436
  -2,543
  -2,655
  -2,775
  -2,901
  -3,034
  -3,174
  -3,322
  -3,478
  -3,643
  -3,816
  -3,999
  -4,191
  -4,393
  -4,605
  -4,829
  -5,064
  -5,312
  -5,572
  -5,845
Total debt, $m
  24,030
  22,272
  23,316
  24,454
  25,687
  27,015
  28,442
  29,969
  31,600
  33,336
  35,181
  37,140
  39,217
  41,415
  43,740
  46,196
  48,791
  51,528
  54,416
  57,459
  60,666
  64,044
  67,601
  71,345
  75,285
  79,430
  83,790
  88,375
  93,196
  98,265
  103,593
Total liabilities, $m
  34,377
  32,618
  33,662
  34,800
  36,033
  37,361
  38,788
  40,315
  41,946
  43,682
  45,527
  47,486
  49,563
  51,761
  54,086
  56,542
  59,137
  61,874
  64,762
  67,805
  71,012
  74,390
  77,947
  81,691
  85,631
  89,776
  94,136
  98,721
  103,542
  108,611
  113,939
Total equity, $m
  2,098
  3,624
  3,740
  3,867
  4,004
  4,151
  4,310
  4,479
  4,661
  4,854
  5,059
  5,276
  5,507
  5,751
  6,010
  6,282
  6,571
  6,875
  7,196
  7,534
  7,890
  8,266
  8,661
  9,077
  9,515
  9,975
  10,460
  10,969
  11,505
  12,068
  12,660
Total liabilities and equity, $m
  36,475
  36,242
  37,402
  38,667
  40,037
  41,512
  43,098
  44,794
  46,607
  48,536
  50,586
  52,762
  55,070
  57,512
  60,096
  62,824
  65,708
  68,749
  71,958
  75,339
  78,902
  82,656
  86,608
  90,768
  95,146
  99,751
  104,596
  109,690
  115,047
  120,679
  126,599
Debt-to-equity ratio
  11.454
  6.150
  6.230
  6.320
  6.420
  6.510
  6.600
  6.690
  6.780
  6.870
  6.950
  7.040
  7.120
  7.200
  7.280
  7.350
  7.430
  7.500
  7.560
  7.630
  7.690
  7.750
  7.810
  7.860
  7.910
  7.960
  8.010
  8.060
  8.100
  8.140
  8.180
Adjusted equity ratio
  0.025
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -832
  -1,711
  -1,625
  -1,680
  -1,739
  -1,803
  -1,873
  -1,948
  -2,028
  -2,114
  -2,205
  -1,503
  -1,607
  -1,717
  -1,833
  -1,956
  -2,085
  -2,223
  -2,368
  -2,520
  -2,681
  -2,851
  -3,030
  -3,218
  -3,416
  -3,625
  -3,844
  -4,075
  -4,318
  -4,573
  -4,841
Depreciation, amort., depletion, $m
  1,700
  2,137
  2,180
  2,226
  2,277
  2,331
  2,390
  2,452
  2,519
  2,590
  2,666
  1,947
  2,032
  2,122
  2,218
  2,318
  2,425
  2,537
  2,655
  2,780
  2,912
  3,050
  3,196
  3,349
  3,511
  3,681
  3,860
  4,048
  4,245
  4,453
  4,672
Funds from operations, $m
  1,622
  426
  554
  547
  538
  528
  517
  505
  491
  476
  461
  444
  425
  406
  385
  363
  339
  314
  288
  260
  230
  199
  166
  131
  95
  56
  15
  -27
  -73
  -120
  -170
Change in working capital, $m
  438
  -49
  -54
  -58
  -63
  -68
  -73
  -78
  -84
  -89
  -95
  -100
  -107
  -113
  -119
  -126
  -133
  -140
  -148
  -156
  -165
  -173
  -182
  -192
  -202
  -213
  -224
  -235
  -247
  -260
  -273
Cash from operations, $m
  1,184
  474
  608
  605
  601
  596
  590
  583
  575
  566
  555
  544
  532
  519
  504
  489
  472
  455
  436
  416
  395
  372
  349
  323
  297
  269
  239
  208
  175
  140
  104
Maintenance CAPEX, $m
  0
  -1,299
  -1,337
  -1,380
  -1,427
  -1,477
  -1,532
  -1,590
  -1,653
  -1,720
  -1,791
  -1,867
  -1,947
  -2,032
  -2,122
  -2,218
  -2,318
  -2,425
  -2,537
  -2,655
  -2,780
  -2,912
  -3,050
  -3,196
  -3,349
  -3,511
  -3,681
  -3,860
  -4,048
  -4,245
  -4,453
New CAPEX, $m
  -626
  -387
  -428
  -467
  -505
  -545
  -585
  -626
  -668
  -712
  -757
  -803
  -851
  -901
  -953
  -1,007
  -1,064
  -1,123
  -1,184
  -1,248
  -1,315
  -1,385
  -1,458
  -1,535
  -1,615
  -1,700
  -1,788
  -1,880
  -1,977
  -2,078
  -2,185
Cash from investing activities, $m
  -9,599
  -1,686
  -1,765
  -1,847
  -1,932
  -2,022
  -2,117
  -2,216
  -2,321
  -2,432
  -2,548
  -2,670
  -2,798
  -2,933
  -3,075
  -3,225
  -3,382
  -3,548
  -3,721
  -3,903
  -4,095
  -4,297
  -4,508
  -4,731
  -4,964
  -5,211
  -5,469
  -5,740
  -6,025
  -6,323
  -6,638
Free cash flow, $m
  -8,415
  -1,211
  -1,158
  -1,242
  -1,331
  -1,426
  -1,527
  -1,634
  -1,747
  -1,866
  -1,992
  -2,126
  -2,267
  -2,415
  -2,571
  -2,736
  -2,910
  -3,093
  -3,285
  -3,487
  -3,700
  -3,924
  -4,160
  -4,408
  -4,668
  -4,942
  -5,230
  -5,532
  -5,850
  -6,184
  -6,534
Issuance/(repayment) of debt, $m
  -546
  -530
  1,044
  1,138
  1,233
  1,329
  1,427
  1,527
  1,630
  1,736
  1,846
  1,959
  2,076
  2,198
  2,325
  2,457
  2,594
  2,738
  2,887
  3,044
  3,207
  3,378
  3,557
  3,744
  3,940
  4,145
  4,360
  4,585
  4,821
  5,069
  5,328
Issuance/(repurchase) of shares, $m
  1,247
  3,237
  1,741
  1,806
  1,876
  1,951
  2,031
  2,117
  2,209
  2,307
  2,410
  1,721
  1,838
  1,961
  2,091
  2,229
  2,374
  2,527
  2,688
  2,858
  3,038
  3,226
  3,425
  3,634
  3,854
  4,086
  4,329
  4,585
  4,854
  5,136
  5,434
Cash from financing (excl. dividends), $m  
  131
  2,707
  2,785
  2,944
  3,109
  3,280
  3,458
  3,644
  3,839
  4,043
  4,256
  3,680
  3,914
  4,159
  4,416
  4,686
  4,968
  5,265
  5,575
  5,902
  6,245
  6,604
  6,982
  7,378
  7,794
  8,231
  8,689
  9,170
  9,675
  10,205
  10,762
Total cash flow (excl. dividends), $m
  -8,283
  1,496
  1,627
  1,702
  1,777
  1,854
  1,931
  2,011
  2,093
  2,177
  2,264
  1,554
  1,647
  1,744
  1,845
  1,949
  2,058
  2,172
  2,291
  2,415
  2,544
  2,680
  2,822
  2,970
  3,126
  3,289
  3,459
  3,638
  3,825
  4,021
  4,227
Retained Cash Flow (-), $m
  -2,098
  -3,237
  -1,741
  -1,806
  -1,876
  -1,951
  -2,031
  -2,117
  -2,209
  -2,307
  -2,410
  -1,721
  -1,838
  -1,961
  -2,091
  -2,229
  -2,374
  -2,527
  -2,688
  -2,858
  -3,038
  -3,226
  -3,425
  -3,634
  -3,854
  -4,086
  -4,329
  -4,585
  -4,854
  -5,136
  -5,434
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,741
  -114
  -104
  -99
  -97
  -100
  -107
  -117
  -130
  -147
  -167
  -190
  -217
  -246
  -279
  -315
  -355
  -398
  -444
  -493
  -546
  -603
  -664
  -728
  -797
  -870
  -947
  -1,029
  -1,115
  -1,206
Discount rate, %
 
  13.80
  14.49
  15.21
  15.98
  16.77
  17.61
  18.49
  19.42
  20.39
  21.41
  22.48
  23.60
  24.78
  26.02
  27.32
  28.69
  30.12
  31.63
  33.21
  34.87
  36.62
  38.45
  40.37
  42.39
  44.51
  46.73
  49.07
  51.52
  54.10
  56.80
PV of cash for distribution, $m
 
  -1,530
  -87
  -68
  -54
  -45
  -38
  -32
  -28
  -24
  -21
  -18
  -15
  -12
  -10
  -7
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  82.7
  77.6
  72.9
  68.4
  64.1
  60.1
  56.4
  52.8
  49.5
  46.4
  44.3
  42.3
  40.4
  38.5
  36.6
  34.9
  33.1
  31.5
  29.8
  28.3
  26.8
  25.4
  24.0
  22.7
  21.5
  20.3
  19.1
  18.0
  17.0
  16.0

Altice USA, Inc. is engaged in providing broadband communications and video services in the United States. The Company’s segments include Cablevision and Cequel. Cablevision provides broadband, pay television and telephony services to residential and business customers in and around the New York metropolitan area. Cequel provides broadband, pay television and telephony services to residential and business customers in the south-central United States. It also provides services through ten states of Texas, West Virginia, Louisiana, Arkansas, North Carolina, Oklahoma, Arizona, California, Missouri and Ohio. The Company also provides Wi-Fi hotspot access content and advertising services. Broadband provides services, such as video streaming, content downloading for time-shifted video consumption and other applications delivered over OTT platforms. Pay Television provides services through cable network. Video services delivered over DSL networks.


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FINANCIAL RATIOS  of  Altice USA Cl A (ATUS)

Valuation Ratios
P/E Ratio -18.9
Price to Sales 2.6
Price to Book 7.5
Price to Tangible Book
Price to Cash Flow 13.3
Price to Free Cash Flow 28.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 1069%
Total Debt to Equity 1145.4%
Interest Coverage 0
Management Effectiveness
Return On Assets -0%
Ret/ On Assets - 3 Yr. Avg. -0%
Return On Total Capital -6.4%
Ret/ On T. Cap. - 3 Yr. Avg. -2.1%
Return On Equity -79.3%
Return On Equity - 3 Yr. Avg. -26.4%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 68.4%
Gross Margin - 3 Yr. Avg. 22.8%
EBITDA Margin 28.3%
EBITDA Margin - 3 Yr. Avg. 9.4%
Operating Margin 5.5%
Oper. Margin - 3 Yr. Avg. 1.8%
Pre-Tax Margin -18.1%
Pre-Tax Margin - 3 Yr. Avg. -6%
Net Profit Margin -13.8%
Net Profit Margin - 3 Yr. Avg. -4.6%
Effective Tax Rate 23.8%
Eff/ Tax Rate - 3 Yr. Avg. 7.9%
Payout Ratio 0%

ATUS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATUS stock intrinsic value calculation we used $6017 million for the last fiscal year's total revenue generated by Altice USA Cl A. The default revenue input number comes from 2016 income statement of Altice USA Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATUS stock valuation model: a) initial revenue growth rate of 3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 13.8%, whose default value for ATUS is calculated based on our internal credit rating of Altice USA Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Altice USA Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATUS stock the variable cost ratio is equal to 94.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $25 million in the base year in the intrinsic value calculation for ATUS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 9.1% for Altice USA Cl A.

Corporate tax rate of 27% is the nominal tax rate for Altice USA Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATUS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATUS are equal to 215.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Altice USA Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATUS is equal to -27%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2098 million for Altice USA Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 725.86 million for Altice USA Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Altice USA Cl A at the current share price and the inputted number of shares is $15.5 billion.

COMPANY NEWS

▶ 4 of the 5 Biggest IPOs in 2017 Bombed. Here's Who Won   [Jan-10-18 11:11AM  Motley Fool]
▶ Deals of the day-Mergers and acquisitions   [Jan-09-18 04:00PM  Reuters]
▶ Altice USA Inc Stock Spikes on Spinoff Plans   [11:45AM  InvestorPlace]
▶ Altice to spin off US unit   [09:44AM  CNBC Videos]
▶ PRESS DIGEST- Financial Times - Jan 9   [Jan-08-18 08:10PM  Reuters]
▶ Sprint Corp Names Michael Combes as President & CFO   [Jan-04-18 01:15PM  InvestorPlace]
▶ Verizon plan to launch 5G broadband lifts shares   [Nov-30-17 12:53PM  Reuters]
▶ [$$] IPOs Roar Back World-Wide, With Asia Driving the Boom   [12:32AM  The Wall Street Journal]
▶ [$$] IPOs Roar Back World-Wide, With Asia Driving the Boom   [Nov-13-17 08:27AM  The Wall Street Journal]
▶ Deals of the day-Mergers and acquisitions   [Nov-06-17 03:22PM  Reuters]
▶ Sprint Makes an MVNO Deal with Altice   [10:32AM  Investopedia]
▶ Altice USA reports 3Q loss   [05:37AM  Associated Press]
▶ Altice USA, Sprint agree to wireless partnership   [Nov-05-17 10:37PM  Reuters]
▶ Introducing Altice One   [Nov-02-17 04:30PM  Business Wire]
▶ Disney, Altice finalise new programming agreement   [Oct-05-17 06:25PM  Reuters]
▶ What's driving the market higher   [Oct-02-17 07:20PM  CNBC Videos]
▶ Disney, Altice Shares Rise On Deal; Verizon Next Up For Mouse?   [10:37AM  Investor's Business Daily]
▶ Focus on fundamentals, not calendar   [06:57PM  CNBC Videos]
▶ Optimum Cable Customers May Face ABC, ESPN Blackout   [Sep-25-17 01:43PM  InvestorPlace]
▶ Markets struggle after Trumps troubles   [09:15AM  Yahoo Finance]
▶ Disney May Play Hardball With Altice Amid ESPN Woes   [Sep-18-17 04:04PM  Investor's Business Daily]
▶ Altice says open-minded about cable M&A   [Sep-12-17 10:51AM  Reuters]
▶ [$$] A Smart Strategy for Cable and Telecom Investors   [Sep-09-17 12:20AM  Barrons.com]
▶ Why Media Stocks & ETFs Are Under Pressure   [Sep-08-17 02:45PM  Zacks]
▶ Charter Communications: No Deal for You   [Sep-06-17 03:45PM  Barrons.com]
▶ Former Suddenlink CTO gets promotion at Altice   [Sep-01-17 01:25PM  American City Business Journals]
▶ Altice USA Announces Technology Executive Appointments   [Aug-30-17 03:30PM  Business Wire]
▶ [$$] Charter M&A Chatter Doesn't Make Sense   [Aug-16-17 12:36PM  Barrons.com]
▶ [$$] Altice-Charter Chatter May Be Just Talk   [Aug-11-17 12:46AM  The Wall Street Journal]
Financial statements of ATUS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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