What Happened?
Shares of telecommunications and cable services provider Altice USA (NYSE: ATUS) fell 5.5% in the morning session after the company reported disappointing third-quarter 2025 financial results that fell short of analyst expectations on both revenue and earnings. Total revenue for the quarter was $2.11 billion, a 5.4% decrease from the same period last year and slightly below forecasts. The company posted a GAAP loss per share of $3.47, a significant downturn from a loss of $0.09 in the prior year's quarter and substantially worse than the consensus estimate of a $0.05 loss. Operationally, Altice USA continued to face challenges, with its broadband subscriber count falling by 167,300 year-over-year. This weak performance also hit its cash generation, as free cash flow was a negative $178.1 million, a sharp reversal from a positive $76.87 million in the same quarter of the previous year.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Altice? Access our full analysis report here.
What Is The Market Telling Us
Altice’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock dropped 6.7% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump.
The President's comments, stating on social media that China has 'become very hostile,' have injected significant volatility into the broader markets. This has particularly affected the leisure industry, which is highly sensitive to economic sentiment and discretionary spending. Leisure stocks, which include companies in travel, entertainment, and hospitality, rely on consumers feeling confident enough to spend on non-essential goods and services. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions. The prospect of escalating tariffs raises concerns about economic headwinds, which could lead to a slowdown in consumer spending. If consumers tighten their budgets in response to economic uncertainty, discretionary purchases are often the first to be cut, directly impacting the revenues of companies in this sector.
Altice is down 14.3% since the beginning of the year, and at $2.03 per share, it is trading 34.7% below its 52-week high of $3.11 from January 2025. Investors who bought $1,000 worth of Altice’s shares 5 years ago would now be looking at an investment worth $69.00.
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