Founder, BWS Financial Inc

Hamed Khorsand

Founder

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BWS Financial Inc

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Equity Bottom-Up

Shenandoah Telecommunications Company / Equity Bottom-Up

Shenandoah Telecommunications Company (SHEN US)

<ul>
<li>SHEN is expanding its network footprint with the acquisition of Horizon Telecom for $385 million in cash and stock.</li>
<li>SHEN is purchasing Horizon for the network footprint and the sales ability to capture commercial customers compared to the majority of SHEN’s customers being residential</li>
<li>The valuation becomes financially reasonable to understand when considering SHEN is paying approximately $51 thousand per fiber miles</li>
</ul>


SHEN is expanding its network footprint with the acquisition of Horizon Telecom for $385 million in cash and stock.
SHEN is purchasing Horizon for the network footprint and the sales ability to capture commercial customers compared to the majority of SHEN’s customers being residential
The valuation becomes financially reasonable to understand when considering SHEN is paying approximately $51 thousand per fiber miles


<ul>
<li>SHEN Continued to add subscribers to the Glo Fiber service. The rate of subscriber growth has steadily increased with the expansion in the number of homes passed</li>
<li>We are upgrading our rating to Neutral in reflection of the progress SHEN has made </li>
<li>SHEN is planning to reach approximately 500 thousand homes passed by 2026 from approximately 183 thousand currently</li>
</ul>


SHEN Continued to add subscribers to the Glo Fiber service. The rate of subscriber growth has steadily increased with the expansion in the number of homes passed
We are upgrading our rating to Neutral in reflection of the progress SHEN has made 
SHEN is planning to reach approximately 500 thousand homes passed by 2026 from approximately 183 thousand currently


SHEN: Calling to Sidelines, Neutral Rating

<ul>
<li>SHEN reported first quarter results benefiting from non-recurring termination revenue and tax refunds. SHEN’s revenue and profitability were aided in the quarter with $1.7 million in termination fee</li>
<li>Net income benefited from a one-time refund on sales tax and interest earned on tax refunds more than offsetting SHEN’s interest expense</li>
<li>SHEN ended the first quarter with 28,793 Glo Fiber subscribers, up 4,507 from the fourth quarter 2022</li>
</ul>


SHEN reported first quarter results benefiting from non-recurring termination revenue and tax refunds. SHEN’s revenue and profitability were aided in the quarter with $1.7 million in termination fee
Net income benefited from a one-time refund on sales tax and interest earned on tax refunds more than offsetting SHEN’s interest expense
SHEN ended the first quarter with 28,793 Glo Fiber subscribers, up 4,507 from the fourth quarter 2022


<ul>
<li>SHEN reported better than expected fourth quarter revenue as more customers subscribe to faster broadband speeds</li>
<li>Our focus is on the seasonally low number of customer additions in the quarter even though SHEN was building out its optical fiber network.</li>
<li>Our negative bias has been built on SHEN's capital expenditure plans requiring the Company to build debt and the timing of when SHEN would reach free cash flow positive</li>
</ul>


SHEN reported better than expected fourth quarter revenue as more customers subscribe to faster broadband speeds
Our focus is on the seasonally low number of customer additions in the quarter even though SHEN was building out its optical fiber network.
Our negative bias has been built on SHEN's capital expenditure plans requiring the Company to build debt and the timing of when SHEN would reach free cash flow positive


<ul>
<li>SHEN is progressing with its fiber buildout under the Glo Fiber brand, but net losses are mounting. SHEN reported a quarterly net loss for the third straight quarter </li>
<li>SHEN also announced the sale of wireless spectrum related to its fixed wireless business, Beam. The cash proceeds are expected to help fund the fiber build out at Glo Fiber</li>
<li>The continued net losses are likely to compress SHEN’s valuation multiple, especially with the debt balance expected to rise in coming quarters</li>
</ul>


SHEN is progressing with its fiber buildout under the Glo Fiber brand, but net losses are mounting. SHEN reported a quarterly net loss for the third straight quarter 
SHEN also announced the sale of wireless spectrum related to its fixed wireless business, Beam. The cash proceeds are expected to help fund the fiber build out at Glo Fiber
The continued net losses are likely to compress SHEN’s valuation multiple, especially with the debt balance expected to rise in coming quarters


United States

Shenandoah Telecommunications Company provides telecommunications services through its subsidiaries.  The Company offers integrated, full service telecommunications products and services in the Northern Shenandoah Valley and surrounding areas.  Shenandoah Telecommunications also holds paging and other radio telecommunications licenses.

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Shenandoah Telecommunications Company (SHEN US)

SHEN: On the Horizon

The purchase price on TTM adjusted EBITDA basis is materially higher than we think anyone should be spending when interest rates are rising....

BWS Financial Inc

SHEN: Calling to Sidelines, Neutral Rating

SHEN continues to grow the number of Glo Fiber subscribers. While this was expected we were valuing SHEN on the basis of an increase in debt...

BWS Financial Inc

SHEN: One-Time Benefits Offset Loss

SHEN reported a net income in the first quarter benefiting from one-time termination fee revenue and tax refund. Without these one-time events SHEN...

BWS Financial Inc

SHEN: Slower Adds from a Larger Network

We argue the seasonally soft numbers could point to potential slowing as SHEN's network has increased over the past year, but that did not...

BWS Financial Inc

SHEN: Levering for Growth, PT to $15

Our price target is now $15 from $16 as we expect SHEN's valuation to compress further. SHEN is expected to increase its debt balance in coming...

BWS Financial Inc

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