Is the Recent Price Jump in Altice USA Shares Justified in 2025?

If you are wrestling with whether to buy, sell, or simply hold onto Altice USA, you are not alone. The stock can feel a bit like a rollercoaster lately, especially with those recent price swings. Over just the past 7 days, Altice USA notched a gain of 5.9%, adding to the 11.6% bump in the last month. Zooming out a bit, year-to-date returns are up 5.5%, and over the last 12 months, shares gained 4.6%. If you have been invested longer term, though, those multi-year losses might still sting, with prices down 53.9% over the past 3 years and an even steeper 91.0% drop over 5 years. Clearly, the journey has not been smooth.

What is driving these rapid changes in sentiment? Some of it comes down to evolving expectations about the sector and Altice USA’s place in it, as investors digest both fresh opportunities and persistent risks in the U.S. telecom space. This has led the market to occasionally reappraise how risky (or promising) the company really is, which naturally factors into the wide price moves we are seeing.

With so much volatility and mixed signals, it is natural to ask, "Is Altice USA actually undervalued, or is there something the market sees that I might be missing?" According to a six-point valuation check, the stock scores a 4, meaning it is undervalued on 4 out of 6 key metrics. That is compelling, but a deeper dive is still needed. Let’s break down the valuation methods investors use to make sense of stocks like this. There may be a smarter way to get the full picture.

Altice USA delivered 4.6% returns over the last year. See how this stacks up to the rest of the Media industry.

Approach 1: Altice USA Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by forecasting a company’s future cash flows and then discounting those projected figures back to today’s value. This method aims to estimate what Altice USA might actually be worth, grounded in its ability to generate cash over time.

Looking at Altice USA, the company reported a trailing twelve month Free Cash Flow (FCF) of -$104.56 million. Recent analyst estimates predict that FCF will turn positive, reaching $305.50 million by 2026. Over the next decade, these cash flows are expected to gradually decline, with Simply Wall St extrapolating them out to $71.98 million in 2035 as the growth rate taps out.

Based on these projections, the DCF model calculates an estimated intrinsic value for Altice USA shares of $2.53. When compared with the current share price, the intrinsic discount implied is just 1.1%. This means the stock is trading very close to its fair value right now, neither strongly underpriced nor overpriced.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Altice USA.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Altice USA's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Altice USA Price vs Sales

The Price-to-Sales (P/S) ratio is often a go-to metric for valuing companies, particularly when they are not currently profitable or have volatile earnings. For Altice USA, which has posted negative net income lately, using P/S helps investors compare its share price to total revenue. This offers a straightforward snapshot of how the market values its sales base.

A company’s P/S ratio is shaped by expectations for future growth and perceived risks. Higher growth companies or those with stable revenue streams typically trade at richer multiples. Conversely, if there is significant uncertainty or slow growth ahead, a lower P/S ratio is generally warranted.

Altice USA’s current P/S ratio stands at just 0.13x, which is far below both the Media industry average of 1.06x and the peer group average of 4.59x. While this suggests an extremely cheap valuation on the surface, it is essential to account for company-specific factors that benchmarks may overlook. This is where Simply Wall St’s proprietary “Fair Ratio” provides a deeper perspective.

The Fair Ratio method factors in Altice USA’s earnings growth outlook, margin quality, company size, risk profile, and where it sits within its industry. This approach offers a more tailored view of valuation than basic peer or industry comparisons. According to this metric, the fair P/S for Altice USA is approximately 0.96x. Since the actual ratio is 0.13x and the difference is well more than the 0.10 threshold, this points to the shares being notably undervalued based on revenue multiples adjusted for company specifics.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Altice USA Narrative

Earlier, we alluded to an even better way to understand valuation, so let’s introduce you to Narratives, a dynamic approach that gives your investment decisions much more meaning than numbers alone.

A Narrative is essentially the story behind your perspective on Altice USA, connecting your assumptions about its future (like revenue, earnings, or margin changes) to a financial forecast and then a fair value. This allows you to clearly see how your expectations translate into a buy or sell decision.

On Simply Wall St’s Community page, Narratives make it easy for anyone to create, share, and compare investment stories. It is a tool popular with millions of investors and is designed to help you justify your view in a structured, accessible way.

By linking your fair value estimate to the current share price, Narratives help you decide whether it is time to act. Because they automatically update with new news or earnings releases, your insight grows as the market changes.

For example, some Altice USA investors believe the stock’s fair value is $5.50 based on bold fiber upgrades, while others see it as low as $1.00 because of mounting debt and tough competition.

Do you think there's more to the story for Altice USA? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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