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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 type="disc"><li>With the sale of the wireless business complete, Shenandoah Telecommunications (SHEN) is now squarely in the broadband business. SHEN has been expanding its fiber, Glo Fiber, and fixed wireless broadband service, Beam, in multiple towns.</li></ul> <ul type="disc"><li>Second quarter results showed gradual sequential growth with more Glo Fiber and Beam subscribers. The second quarter was the last time SHEN would recognize net income from its legacy wireless business.</li></ul> <ul type="disc"><li>The cash dividend removes a near-term catalyst for capital return while investors would need to wait for Glo Fiber and Beam to reach scale.</li></ul> <ul type="disc"><li>The capital-intensive nature of SHEN’s business is expected to result in SHEN not reaching free cash flow positive until 2024.</li></ul>

With the sale of the wireless business complete, Shenandoah Telecommunications (SHEN) is now squarely in the broadband business. SHEN has been expanding its fiber, Glo Fiber, and fixed wireless broadband service, Beam, in multiple towns. Second quarter results showed gradual sequential growth with more Glo Fiber and Beam subscribers. The second quarter was the last time SHEN would recognize net income from its legacy wireless business. The cash dividend removes a near-term catalyst for capital return while investors would need to wait for Glo Fiber and Beam to reach scale. The capital-intensive nature of SHEN’s business is expected to result in SHEN not reaching free cash flow positive until 2024.

<ul type="disc"><li>
Shenandoah Telecommunications (SHEN) is progressing on its network buildout ambitions in reaching 700 thousand homes passed while simultaneously growing the number of broadband subscribers.</li></ul> <ul type="disc"><li>The profitability from the wireless business is helping the Company finance its capital expenditures this year before having to dip into debt. SHEN’s transition away from wireless puts pressure for growing its broadband businesses, Glo Fiber and Beam.</li></ul> <ul type="disc"><li>Glo Fiber is now available in five markets with two more being built out in the second quarter. SHEN plans to have Glo Fiber available in another six markets in the second half of 2021. That would give Glo Fiber a home passed rate of approximately 165 thousand.</li></ul> <ul type="disc"><li>SHEN is planning to spend $100 million on Glo Fiber and Beam this year with more investment in 2022 and 2023. The heavy nature of the capital expenditure plan puts SHEN in a negative free cash flow position for the next couple of years; since it takes approximately three years to begin generating a return on investment.</li></ul>


Shenandoah Telecommunications (SHEN) is progressing on its network buildout ambitions in reaching 700 thousand homes passed while simultaneously growing the number of broadband subscribers. The profitability from the wireless business is helping the Company finance its capital expenditures this year before having to dip into debt. SHEN’s transition away from wireless puts pressure for growing its broadband businesses, Glo Fiber and Beam. Glo Fiber is now available in five markets with two more being built out in the second quarter. SHEN plans to have Glo Fiber available in another six markets in the second half of 2021. That would give Glo Fiber a home passed rate of approximately 165 thousand. SHEN is planning to spend $100 million on Glo Fiber and Beam this year with more investment in 2022 and 2023. The heavy nature of the capital expenditure plan puts SHEN in a negative free cash flow position for the next couple of years; since it takes approximately three years to begin generating a return on investment.

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: An Expensive Call

The sale of the wireless business makes SHEN dependent on building out its fiber business. After the dividend there will be little cash left over...

BWS Financial Inc

SHEN: Glo-Ing Expansion

SHEN's subscriber growth in its new broadband service is encouraging, but not enough to suppress free cash flow concerns over the next couple of years

BWS Financial Inc

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