WideOpenWest Inc WOW 1.18% shares are down 1.6 percent on Monday after a tidal wave of Wall Street analysts commented on the stock on Monday. WideOpenWest’s May 25 IPO has mostly been a disappointment for investors. The stock debuted roughly $1 below its $17 price, an in its first 25 days of trading has barely reached the $17 level.
IPO underwriters are restricted from commenting on a stock for the first 25 days after its IPO, but analysts were free to speak their minds on Monday.
“We argue the shares look attractively valued relative to peers on both EV/EBITDA and P/FCF multiples and believe that as the company executes its business plan as a public company over the coming quarters, the valuation discount should close,” Credit Suisse analyst Omar Sheikhwrote.
The primary driver behind WideOpenWest’s “wide open” earnings and free cash flow growth potential in the next two years will be high speed data customers, Sheikh wrote.
At the same time, pricing competition from Comcast Corporation CMCSA 0.28% and Charter Communications, Inc. CHTR 1.11% poses the biggest threat to this growth.
In terms of valuation, Sheikh says Cable One Inc CABO 0.12% is closest comparison to WideOpenWest on the market today. While Cable One shares trade at 9.4x 2018 EV/EBITDA and 34.7x 2018 P/FCF, WideOpenWest shares trade at just 7.6x and 18.0x, respectively.
Credit Suisse initiated coverage of WideOpenWest at Outperform and set a price target of $20 for the stock. Here’s…
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