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Consolidated Communications Holdings, Inc. (CNSL)

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6.97-0.10 (-1.41%)
At close: 04:00PM EDT
6.97 0.00 (0.00%)
After hours: 04:13PM EDT
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  • k
    kingsting
    Here's a report. I guess some analysts are still negative because of the elimination of the dividend. The stock is already above his price target.
    Analysis prepared by Keith Snyder on Jun 02, 2022 04:07 PM ET, when the stock traded at USD 7.49
    Highlights
    Following a 2.4% decline and 1.7% decline in revenues in 2020 and 2021, we expect a decline in 2022 and 2023 revenues of 8.6% and 2.5%, respectively. We see continued erosion in voice and network access, which will cap potential upside from over-the-top (OTT) uptake fromfiber buildout. CNSL's acquisition of FairPoint
    materially expands its fiber presence while avoiding significant geographic overlap; we still see revenue pressure from step-downs in Connect America Fund (CAF) II and Texas USF funding. We expect CNSL will be very active in the Rural Digital Opportunity Fund, which is estimated to be larger than CAF II at $20.4
    billion.
    EBITDA margins will likely be between 35.5% and 37.3% in 2022 and 2023 compared to the 34.8% margin in 2021. We anticipate tight cost controls as well as greater synergies from acquisitions, to be offset by rebranding/ marketing costs. We positively view recent debt refinancing efforts.
    CNSL expects capex to be between $475M and $495M in 2022, down from $515.8M in 2021,with a focus on network speed improvements and fiber footprint expansion.
    Investment Rationale/Risk
    Our Hold opinion reflects our concern over deteriorating financials. CNSL announced that the board of directors has decided to eliminate the dividend in an effort to focus on deleveraging. Net debt to adjusted EBITDA
    currently sits at 4.04x. CNSL's long-term goal is to reduce that to less than 3.0x. CNSL believes that debt reduction is critical to accelerate network investments. We negatively view the dividend elimination, and believe the debt reduction target dates are too slow and will require asset divestitures. The company risks
    missing out on new opportunities due to under-investment in its network.
    Risks to our recommendation and target include. higher-than-expected access line and equipment sale losses, lower regulatory revenue, and/or reduction in future cash distributions from partnerships.
    Our 12-month target price of $7 reflects a 7.3x EV/EBITDA multiple applied to our 2022
    estimate, a discount to peers and its ten-year historical average multiple at 8.3x, reflecting weak financials, high leverage and the elimination of its dividend.
  • R
    Richard
    Really SAD when investors don't comment on this stock; BUT then the BOARD wouldn't listen anyway!
  • M
    Marge
    Searchlight Capital buying shares on the open market. Buying shares cheap before they take the whole company private
  • k
    kingsting
    anybody thinks this will get bought out or go BK?
  • S
    Steve F
    For what it's worth. Xcel Energy has been putting up flags in my neighborhood for the last couple weeks.
    I was awoken at 8 AM this morning by work going on in my backyard. Consolidated is putting down fiber in the neighborhood. I would sure welcome the competition. I currently use spectrum and the bill just keeps going up.
  • k
    kingsting
    The way this stock has been moving lately sure smells like a buyout could be in the works, but what do i know?
  • M
    Michael
    It's comforting to know after reviewing the CNSL quarterly conference call transcript that CNSL management effectively doubled management bonuses while crushing investors with poor financial performance, a cratering stock and complete dividend elimination.

    Marc Berkowitz -- Aviva Investors -- Analyst
    Okay. So just to understand, if you can focus mostly on accrued compensation, that seems like the most area of variability in working capital. Was Q1 payments made this year and not last year? Is that what explains the difference?

    Steven Childers -- Chief Financial Officer
    It was higher --

    Marc Berkowitz -- Aviva Investors -- Analyst
    Again, it looks like last year was a $4 million storage. This year was a $10 million use.

    Steven Childers -- Chief Financial Officer
    We paid a higher bonus in 2019 for '18 than we did the prior year.
  • j
    joellen
    The case for Consolidated Communications (NASDAQ:CNSL) is much like that of CBB before its sale to Brookfield: hard to see at first glance. Both stocks looked to have a dangerous combination of high leverage and low growth.

    Indeed, Consolidated closed 2019 with nearly $2.3 billion in borrowings net of cash; its current market capitalization is just over $500 million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) declined almost 3% in 2019, and is guided roughly flat in 2020.

    But both companies have fiber which may be more valuable than near-term earnings suggest. Indeed, looking at the valuation assigned Cincinnati Bell in its agreed-to sale, Consolidated could be worth as much as $20 per share. The stock closed Friday at $6.30, even after gaining 26% on Thursday following the fourth-quarter earnings report.

    Those gains might lead some investors to believe that the easy money has been made. But CNSL traded at $12 as recently as April, before the company eliminated its dividend to focus on deleveraging. Meanwhile, CBB went from a low under $4 to its current $12. If CNSL is similar on that basis, too, there’s a lot of upside remaining.
  • S
    Steve F
    Those guys & gals at Zacks sure are geniuses. How do they come up with such insightful analysis ?

    Consolidated Communications (CNSL) Gains As Market Dips: What You Should Know
    Zacks Equity Research: July 19, 2019

    7 days later
    Consolidated Communications (CNSL) Stock Sinks As Market Gains: What You Should Know
    Zacks Equity Research: July 26, 2019
  • B
    Bill
    Consolidated Communications Holdings, Inc. CNSL provides telecommunications services to business and residential customers in the United States. The company currently has a Zacks Rank 2 and a beta of 0.83. The Zacks Consensus Estimate for its current-year earnings increased 21% over the past 60 days. The stock’s expected earnings growth rates for the current and next quarter are a superb 20% and 33.3%, respectively.
  • j
    joellen
    a lot of food for thought: take over coming???? Acadian Asset Management LLC acquired a new stake in shares of Consolidated Communications Holdings Inc (NASDAQ:CNSL) during the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 1,296,362 shares of the utilities provider’s stock, valued at approximately $6,390,000. Acadian Asset Management LLC owned 1.80% of Consolidated Communications at the end of the most recent reporting period.
    A number of other hedge funds also recently modified their holdings of the business. JPMorgan Chase & Co. grew its stake in shares of Consolidated Communications by 313.5% during the second quarter. JPMorgan Chase & Co. now owns 3,498,424 shares of the utilities provider’s stock valued at $17,142,000 after buying an additional 2,652,396 shares during the last quarter. First Trust Advisors LP grew its stake in Consolidated Communications by 140.8% in the second quarter. First Trust Advisors LP now owns 3,268,691 shares of the utilities provider’s stock worth $16,115,000 after purchasing an additional 1,911,180 shares in the last quarter. Principal Financial Group Inc. grew its stake in Consolidated Communications by 19.5% in the first quarter. Principal Financial Group Inc. now owns 4,852,919 shares of the utilities provider’s stock worth $52,945,000 after purchasing an additional 791,953 shares in the last quarter. Dimensional Fund Advisors LP grew its stake in Consolidated Communications by 5.1% in the fourth quarter. Dimensional Fund Advisors LP now owns 4,320,113 shares of the utilities provider’s stock worth $42,683,000 after purchasing an additional 209,049 shares in the last quarter. Finally, GSA Capital Partners LLP bought a new position in Consolidated Communications in the second quarter worth approximately $1,023,000. Institutional investors and hedge funds own 75.94% of the company’s stock.
  • S
    Steve F
    As far as a shareholder lawsuit relating to the elimination of the dividend, you have no case.
    But insider trading charges are a whole different story. Volume exploded over the previous 6 trading days.
    Somebody knew, & it wasn't retail investors.
    [URL=http://www.imagebam.com/image/f717de1205296324][IMG]http://thumbs2.imagebam.com/5f/e6/df/f717de1205296324.jpg[/IMG][/URL]
    ImageBam
    www.imagebam.com
  • m
    mitchell
    Shareholder meeting April 26

    CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
    TO BE HELD APRIL 26, 2021
    To Our Stockholders:
    The 2021 annual meeting of stockholders of Consolidated Communications Holdings, Inc. (the “Company”) will be held in a virtual meeting format only on April 26, 2021, at 9:00 a.m., central time. The 2021 annual meeting of stockholders is being held virtually in light of continued public health concerns regarding the COVID-19 pandemic and for the following purposes:
    1.
    To elect David G. Fuller as Class I director, in accordance with our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each as amended
    (Proposal No. 1);

    2.
    To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (Proposal No. 2);

    3.
    To conduct an advisory vote on the approval of the compensation of our named executive officers (Proposal No. 3);

    4.
    To approve an amendment to our Amended and Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock to 150,000,000 shares (Proposal No. 4);

    5.
    To approve an amendment to our Amended and Restated Certificate of Incorporation, as amended, to eliminate our classified Board structure (Proposal No. 5);

    6.
    To approve the issuance to Searchlight Capital Partners of additional shares of our common stock equal to 20% or more of the Company’s outstanding common stock pursuant to Nasdaq listing rule 5635 (Proposal No. 6);

    7.
    To approve a share increase under the Consolidated Communications Holdings, Inc. Long-Term Incentive Plan, as amended (Proposal No. 7); and

    8.
    To transact such other business as may properly come before the annual meeting and any adjournment or postponement thereof.

    Only stockholders of record at the close of business on February 25, 2021 are entitled to vote at the meeting or at any postponement or adjournment thereof.
    Your vote is very important. We hope that you will attend the virtual meeting, but whether or not you plan to attend, please vote your shares in advance so that your shares will be represented. If you received a printed copy of the proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote via the Internet; (ii) vote by telephone; or (iii) complete, sign, date and return your proxy card in the postage-paid envelope provided. We encourage you to vote via the Internet, as this is the most cost-effective method to cast your vote. If you received only a Notice of Internet Availability of Proxy Materials by mail, you may vote your shares at the Internet site address listed on your notice. If you hold your shares through an account with a bank, broker or similar organization, please follow the instructions you receive from the holder of record to vote your shares.
    By Order of the Board of Directors,
    [MISSING IMAGE: SG_GARRETTVAN-BW.JPG]
    J. Garrett Van Osdell
    Chief Legal Officer & Secretary
    March 17, 2021
  • S
    Steve F
    About 2 weeks away from another quarterly earnings report. I've stated this before, & I'll state it again, the key to a turnaround for the company, & hopefully the stock price, is the top line (revenues)

    Go to this page https://ycharts.com/companies/CNSL/revenues
    The default time period shown is 5 years. Notice the peak for 1/4 revenues was the September 1/4 of 2017 hold your pointer over that peak & it will show you revenues were 363 million. Move the pointer to the right, & you'll see in the most recent 1/4, revenues were 333 million.
    When I last stated this, someone here replied with something like this. “Big deal, revenues are only down $30 million”
    That's not the right way to look at it. If you apply that 30 million over one year (4 quarters) it equals 120 million.

    Before you move your pointer to the thumbs down button because you don't like what I've pointed out, do one more thing. Above the revenue chart, change the setting from 5 years, to 1 year.

    This, not manipulation, is the reason shares have gone from 13+ to $3.50 over the last 12 months.

    Until revenues go up, or at least stabilize, I don't see any substantial improvement in the share price. The elimination of the dividend freed up a lot of cash, what they do with that cash will determine the future of the company. We can only hope they're competent enough to make it work at some point.
    In depth view into Consolidated Communications Holdings Revenue (Quarterly) including historical data from 2005, charts, stats and industry comps.
    In depth view into Consolidated Communications Holdings Revenue (Quarterly) including historical data from 2005, charts, stats and industry comps.
    ycharts.com
  • S
    Steve F
    ATTN Eric:
    About 3 weeks ago you asked……
    “what has materially changed (besides dropping the dividend) about this company”

    This might answer your question.
    https://ycharts.com/companies/CNSL/revenues
    Notice the big jump in revenues in 2018.
    That was the result of the 2017 acquisition of FairPoint communications.

    Notice that since that time, revenues have slowly drifted lower.
    In 2018, they offered low introductory rates to attract new customers.
    Around $80.00 per month for cable & DSL Internet. That has doubled to $160.00

    This tells me that a lot of those people who signed up because of the low introductory rates, have since dropped Consolidated.

    If they hadn't, the revenue chart wouldn't show the slow but steady decline.
    So you're right, as far as assets, it's the same company it was when it was $14 a share. But with no dividend, declining revenues, poor customer service, etc, I'm thinking it ‘might be’ overvalued @ this point.

    People can pump stocks, claim their undervalued, claim shorts are holding them down, etc. etc. etc.
    I don't believe that. For a companies stock to appreciate significantly, it has to grow (top line growth over long periods of time)
    Go back to that link I provided and enter stock symbols for companies who have done very well over the past 10 years.
    You'll see they all have one thing in common, consistent revenue growth.
    In depth view into Consolidated Communications Holdings Revenue (Quarterly) including historical data from 2005, charts, stats and industry comps.
    In depth view into Consolidated Communications Holdings Revenue (Quarterly) including historical data from 2005, charts, stats and industry comps.
    ycharts.com
  • j
    joellen
    over 15 333 000 short shares.....imagine if they beat tomorrow...
  • B
    Bill
    Own 4,500 shares in the low 20s and believe that I will never see the green side. I bought for the dividend, and now I have lost on both ends. Will it come back to at least $10? All I can do is hope I can get my loss 50%. Sad. sad investment. I thought I was better then this, but guess not.
  • j
    joellen
    The case for Consolidated Communications (NASDAQ:CNSL) is much like that of CBB before its sale to Macquerie: hard to see at first glance. Both stocks looked to have a dangerous combination of high leverage and low growth.

    Indeed, Consolidated closed 2019 with nearly $2.3 billion in borrowings net of cash; its current market capitalization is just over $500 million. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) declined almost 3% in 2019, and is guided roughly flat in 2020.

    But both companies have fiber which may be more valuable than near-term earnings suggest. Indeed, looking at the valuation assigned Cincinnati Bell in its agreed-to sale, Consolidated could be worth as much as $20 per share. The stock closed Friday at $6.10, even after gaining 26% on Thursday following the fourth-quarter earnings report.

    Those gains might lead some investors to believe that the easy money has been made. But CNSL traded at $12 as recently as April, before the company eliminated its dividend to focus on deleveraging. Meanwhile, CBB went from a low under $4 to its current $14.75. If CNSL is similar on that basis, too, there’s a lot of upside remaining
  • k
    kenneth
    Cincinnati Bell owns approx owns approximately 16,500 route miles of fiber optic network; Consolidated owns approximately 37,000 route miles of fiber optic network— for those interested in a value determination.
  • S
    Steve F
    In spite of what some others here say, revenues matter!
    This is the 1st time since mid 2017 that we didn't see a sequential drop in quarterly revenue.
    It's plain to see that 'the street' likes that.