Cable One has gotten torched over the last six months - since July 2025, its stock price has dropped 38% to $87 per share. This may have investors wondering how to approach the situation.

Is now the time to buy Cable One, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think Cable One Will Underperform?

Even with the cheaper entry price, we're sitting this one out for now. Here are three reasons there are better opportunities than CABO and a stock we'd rather own.

1. Decline in Residential Data Subscribers Points to Weak Demand

Revenue growth can be broken down into changes in price and volume (for companies like Cable One, our preferred volume metric is residential data subscribers). While both are important, the latter is the most critical to analyze because prices have a ceiling.

Cable One’s residential data subscribers came in at 1.01 million in the latest quarter, and over the last two years, averaged 1.2% year-on-year declines. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests Cable One might have to lower prices or invest in product improvements to grow, factors that can hinder near-term profitability.

2. EPS Barely Growing

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Cable One’s EPS grew at a weak 5.6% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 3.1% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Cable One’s ROIC has unfortunately decreased. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

Final Judgment

Cable One doesn’t pass our quality test. After the recent drawdown, the stock trades at 2.3× forward P/E (or $87 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. We’d suggest looking at an all-weather company that owns household favorite Taco Bell.

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