Consolidated Communications Holdings, Inc. (CNSL) | Investment Case

1. Company Snapshot

1.a. Company Description

Consolidated Communications Holdings, Inc., together with its subsidiaries, provides broadband and business communication solutions for consumer, commercial, and carrier channels in the United States.It offers high-speed broadband Internet access and voice over Internet protocol (VoIP) phone services; commercial data connectivity services in various markets, including Ethernet services, private line data services, software defined wide area network, and multi-protocol label switching services; networking services; cloud-based services; data center and disaster recovery solutions; and wholesale services to regional and national interexchange, and wireless carriers comprising cellular backhaul and other fiber transport solutions.The company also provides voice services, such as local phone and long-distance services; and sells business equipment, as well as offers related hardware and maintenance support, video, and other miscellaneous services.

In addition, it offers video services, which consist of high-definition television, digital video recorders (DVR), and/or a whole home DVR; and on-demand streaming TV services that provide endless entertainment options.Further, the company provides network access services that include interstate and intrastate switched access, network special access, and end user access; and telephone directory publishing, video advertising, billing and support, and other miscellaneous services.Consolidated Communications Holdings, Inc.

was founded in 1894 and is headquartered in Mattoon, Illinois.

Show Full description

1.b. Last Insights on CNSL

Consolidated Communications Holdings, Inc. has been driven by recent acquisitions and strategic partnerships. The company's pending acquisition by Searchlight Capital Partners and British Columbia Investment Management Corporation (BCI) is expected to bring significant value to shareholders. Additionally, the company has made certain financial information available to current and prospective bondholders and securities analysts, providing transparency and potentially increasing investor confidence. The company's removal from the S&P SmallCap 600 index suggests a potential reclassification or reevaluation of its market position.

1.c. Company Highlights

Last Price	4.64
Change Percentage	-0.22%
Open	4.64
Previous Close	4.65
Market Cap ( Millions)	550
Volume	324699
Year High	4.65
Year Low	3.42
M A 50	4.59
M A 200	4.41

FCF Yield	-29.51%
Dividend Yield	0.00%
ROE	-22.50%
Debt / Equity	1021.77%
Net Debt / EBIDTA	1933.99%
Price To Book	2.26
Price Earnings Ratio	-5.1
Price To FCF	-3.39
Price To sales	1.02
EV / EBITDA	23.85

2. Transcript Summary

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3. NewsRoom

Consolidated Communications Becomes Fidium, Uniting All Services Under One Bold Identity

Sep -22

Source: businesswire.com

Consolidated Communications Announces CEO Transition

Sep -17

Source: businesswire.com

Consolidated Communications Closes Inaugural $1.344 Billion Asset Backed Securitization and $1.5 Billion Revolving Warehouse Facility

May -22

Source: businesswire.com

KBRA Assigns Preliminary Ratings to Consolidated Communications, LLC and Fidium Fiber Finance Holdco LLC, Series 2025-1, 2025-2 and 2025-3 Secured Notes

May -05

Source: businesswire.com

Consolidated Communications Announces Availability of Certain Financial Information

Feb -19

Source: businesswire.com

International Seaways Set to Join S&P SmallCap 600

Dec -23

Source: prnewswire.com

Consolidated Communications to Release Third Quarter 2024 Earnings on Nov. 5

Oct -16

Source: businesswire.com

Consolidated Communications Awards $50,000 to Schools in 2024 to Support Technology Use in Education

Sep -30

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.78%)

6. Segments

Consumer - Broadband (Data and Voice Over Internet Protocol)

Expected Growth: 4.8%

Growing demand for high-speed internet and voice services, increasing adoption of online streaming and remote work, and expansion of fiber-optic networks drive growth in the broadband market.

Commercial - Data Services (Includes Voice Over Internet Protocol)

Expected Growth: 4.5%

Growing demand for cloud-based services, increasing adoption of VoIP technology, and rising need for secure and reliable data solutions drive the growth of Consolidated Communications' Commercial - Data Services segment.

Commercial - Voice Services

Expected Growth: 4.5%

Growing demand for reliable voice solutions, increasing adoption of cloud-based communication services, and rising need for advanced features such as toll-free numbers and call analytics drive the growth of Consolidated Communications' Commercial Voice Services.

Carrier - Data and Transport Services

Expected Growth: 4.5%

Growing demand for high-speed internet and secure connectivity solutions, driven by increasing adoption of cloud-based services, IoT, and 5G networks, will fuel the growth of Carrier - Data and Transport Services.

Consumer - Voice Services

Expected Growth: 4.5%

Growing demand for reliable voice services, increasing adoption of VoIP technology, and expanding fiber-optic network infrastructure drive the growth of Consumer Voice Services segment.

Network Access

Expected Growth: 4.5%

Growing demand for high-speed internet and data services, increasing adoption of cloud-based solutions, and expansion into new markets drive growth for Network Access from Consolidated Communications Holdings, Inc.

Commercial - Other

Expected Growth: 10.2%

Growing demand for digital transformation, increasing adoption of cloud-based services, and rising need for robust cybersecurity solutions drive growth in non-telco services for businesses.

Consumer - Video Services

Expected Growth: 4.5%

Growing demand for high-quality video content, increasing adoption of streaming services, and advancements in digital TV technology are driving the growth of Consumer Video Services from Consolidated Communications Holdings, Inc.

Subsidies

Expected Growth: 4.5%

Consolidated Communications Holdings, Inc.'s subsidies for broadband infrastructure development and internet access in rural areas will drive growth, bridging the digital divide and increasing connectivity, thereby boosting demand for its services.

Carrier - Voice Services

Expected Growth: 4.5%

Growing demand for reliable and scalable voice services, increasing adoption of cloud-based communication solutions, and rising need for efficient communication systems drive the growth of Carrier - Voice Services from Consolidated Communications Holdings, Inc.

Other Products and Services

Expected Growth: 4.5%

Consolidated Communications' diversified product portfolio, including IT services, cybersecurity, and data center services, drives growth. Increasing demand for secure and efficient network solutions, coupled with the need for businesses to adapt to digital transformation, fuels growth in the industry.

Carrier - Other

Expected Growth: 4.5%

Driven by increasing demand for IoT, M2M, and cloud-based services, the 'Other' carrier segment is expected to grow steadily. Consolidated Communications' investments in network infrastructure and expansion of its fiber-optic network will further support growth in this segment.

7. Detailed Products

Business Internet

High-speed internet services for businesses of all sizes, providing reliable and secure connectivity

Business Voice

Cloud-based voice solutions for businesses, offering advanced features and scalability

Data and Transport Services

Secure and reliable data transport services for businesses, including Ethernet and wavelength services

Cloud Services

Cloud-based infrastructure and application services, including backup and disaster recovery solutions

Managed IT Services

Comprehensive IT management services, including network monitoring, security, and help desk support

Fiber-Based Services

High-speed fiber-based internet, voice, and data services for businesses and residential customers

8. Consolidated Communications Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Consolidated Communications Holdings, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the high costs associated with switching to alternative services.

Bargaining Power Of Customers

Consolidated Communications Holdings, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative service providers.

Bargaining Power Of Suppliers

Consolidated Communications Holdings, Inc. has a diverse supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the high capital requirements and regulatory barriers to entry in the telecommunications industry.

Intensity Of Rivalry

The telecommunications industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	73.51%
Debt Cost	8.94%
Equity Weight	26.49%
Equity Cost	9.69%
WACC	9.14%
Leverage	277.57%

11. Quality Control: Consolidated Communications Holdings, Inc. passed 0 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Shentel

A-Score: 5.3/10

Value: 7.2

Growth: 5.1

Quality: 2.6

Yield: 6.0

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

Ribbon Communications

A-Score: 4.3/10

Value: 7.0

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

Globalstar

A-Score: 4.3/10

Value: 3.1

Growth: 7.3

Quality: 3.4

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

Anterix

A-Score: 4.3/10

Value: 6.2

Growth: 4.9

Quality: 8.8

Yield: 0.0

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

Consolidated Communications Holdings

A-Score: 3.2/10

Value: 7.2

Growth: 0.7

Quality: 1.1

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

Gogo

A-Score: 2.9/10

Value: 2.0

Growth: 3.0

Quality: 4.0

Yield: 0.0

Momentum: 7.0

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.32%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.14%

Consolidated Communications Holdings, Inc. - US2090341072

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CNSL

1.c. Company Highlights

Lower Growth

Lower Quality

Cheaper

Earnings Beats

Less Volatile

Revenues Beats

Average Yield

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.78%)

6. Segments

Consumer - Broadband (Data and Voice Over Internet Protocol)

Expected Growth: 4.8%

Commercial - Data Services (Includes Voice Over Internet Protocol)

Expected Growth: 4.5%

Commercial - Voice Services

Expected Growth: 4.5%

Carrier - Data and Transport Services

Expected Growth: 4.5%

Consumer - Voice Services

Expected Growth: 4.5%

Network Access

Expected Growth: 4.5%

Commercial - Other

Expected Growth: 10.2%

Consumer - Video Services

Expected Growth: 4.5%

Subsidies

Expected Growth: 4.5%

Carrier - Voice Services

Expected Growth: 4.5%

Other Products and Services

Expected Growth: 4.5%

Carrier - Other

Expected Growth: 4.5%

7. Detailed Products

Business Internet

Business Voice

Data and Transport Services

Cloud Services

Managed IT Services

Fiber-Based Services

8. Consolidated Communications Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Consolidated Communications Holdings, Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.e Scoring ^Insights

12.f DCF ^BETA