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WideOpenWest, Inc. (NYSE:WOW): Is It A Smart Long Term Opportunity?

Simply Wall St

As WideOpenWest, Inc. (NYSE:WOW) announced its earnings release on 30 June 2019, analysts seem cautiously bearish, with profits predicted to rise by 8.7% next year compared with the higher past 5-year average growth rate of 15%. With trailing-twelve-month net income at current levels of -US$90.6m, we should see this rise to -US$98.5m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for WideOpenWest

What can we expect from WideOpenWest in the longer term?

Longer term expectations from the 9 analysts covering WOW’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of WOW's earnings growth over these next few years.

NYSE:WOW Past and Future Earnings, August 5th 2019

This results in an annual growth rate of 19% based on the most recent earnings level of -US$90.6m to the final forecast of -US$150.0m by 2022. This leads to an EPS of $1.39 in the final year of projections relative to the current EPS of $-1.11. Margins are currently sitting at -7.9%, which is expected to expand to -12% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For WideOpenWest, I've compiled three fundamental factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is WideOpenWest worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WideOpenWest is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WideOpenWest? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.