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A Peek at ISP Stock Prices

Every few years, I take a look at the stock prices of the big ISPs. The big publicly traded companies seem to care more about stock prices than almost anything else. I was curious about how the stock prices of the big ISPs compared to their performance measured in terms of net new broadband customers added through the first three quarters of 2021. The following table shows the stock prices at the beginning of 2021 and 2022, along with the change in broadband customers.

      2022      2021 % Change    Adds % Change
Comcast $50.33 $50.51 -0.4% 1,114,000 3.6%
Charter $651.97 $647.03 0.8% 1,020,000 3.5%
Altice $16.18 $36.71 -55.9% 28,900 0.7%
Cable One $1,763.45 $2,152.22 -18.1% 173,000 20.2%
AT&T $24.60 $29.44 -16.4% 126,000 0.8%
Verizon $51.96 $58.85 -11.7% 208,000 2.9%
Lumen $12.55 $9.72 29.1% (178,000) -3.7%
Frontier $29.49 $26.95 9.4% (280,000) -9.1%
TDS $20.15 $18.84 7.0% 29,500 6.0%

I am as far away from being a stock analyst as can be imagined. I didn’t do any serious research into these company stocks, and so this blog is mostly idle speculation.

2021 was not a great year for the big cable company stocks. Both Comcast and Charter each grew by over one million broadband customers in three quarters, and yet their stock price stagnated for the year. In addition to growing customers, both companies had healthy rate increases last year that had to have boosted earnings. It makes me wonder what these companies would have to do for the stock prices to rise? It’s hard to think that these companies can continue to add a million new broadband customers each year.

Altice stock took a big bath, losing half its value during the year. It certainly can’t help that the company has stagnated while other cable companies have added customers – in the most recent quarter, the company lost net customers. But a drop that large must be due to other factors than just poor customer growth.

Cable One seemingly is being rewarded for the acquisition of properties from WOW!. I don’t know how the company is growing outside of that acquisition.

The two big telephone companies fared even worse than the cable companies, with substantial drops in stock prices. AT&T and Verizon saw net gains in broadband customers for the first time in several years. But these companies are both valued far more as cellular companies than as broadband companies – and the stock price drop likely has a lot more due to the increasing competitiveness of the cellular market.

Interestingly, Lumen and Frontier both had increases in stock prices despite a continued net drop in broadband customers. Lumen might have gotten a boost from the announced sale of mostly copper customers in twenty states. Frontier’s stock price boost is likely due mostly to coming out of bankruptcy with a healthy balance sheet. Both of these companies are now aggressively adding fiber customers and it will be interesting to see what that does to stock prices over the next year.

TDS is the only company on the list where stock prices match broadband customer growth. I’m sure that’s more a coincidence than anything else.

I worked for several publicly traded companies during my work career, and I know that stock prices are always at the forefront of internal discussions about the policies and goals of the companies. The 2021 stock price performance must be creating some interesting conversations in Board rooms around the industry.

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