Frontier Communications (FYBR)

Communications

MYST Advisors

Building fibre is a lot more difficult, more expensive and takes longer than “what’s in a spreadsheet” - subscriber penetration rates have been underwhelming and trends are only worsening. Cable stocks have massively derated and now trade at 6-7x EBITDA while FYBR trades at ~5.5x, so the opportunity to expand from a “Copper to a Cable” multiple has disappeared. Expects FYBR to lower guidance when it reports 2Q results in early Aug. TP $8 (50% downside), but longer-term flags bankruptcy risk (leverage is ~4x but will rise to ~5.5x by the time the build is finished. There is no FCF and the company will burn another ~$5bn of cash between now and the end of 2025).

- 07 July, 2023

Frontier Communications (FYBR)

Communications

New Street Research

Guidance up. Targets up. Valuation up - EBITDA beat estimates and guidance raised (consensus is too low for 2022). New Street now assumes FYBR deploys fibre to 11m locations rather than 10m. The company adds $2bn+ in equity value for every 1m locations they upgrade ($9/share). There are another 1m locations that could be upgraded organically and 3-4m that could be upgraded with subsidies that New Street are ignoring for now. TP increased to $126 (380% upside). FYBR remains the most compelling way to invest in broadband infrastructure.

- 19 August, 2022

Frontier Communications (FYBR)

Communications

New Street Research

New management, new strategy - FYBR to transform itself from broken ILEC into a fiber-based infrastructure asset, resulting in a return to growing revenues, expanding margins and a higher multiple. New Street see the opportunity for a four-fold increase in the equity organically, with potential for a ten-fold increase with M&A over time.

- 30 April, 2021