Here's Why You Should Stay Away From RCI Stock Entering Into 2025

Stock Performance - Roger Communications (RCI) shares dropped 17% over the past six months, underperforming the Zacks Consumer Discretionary sector's 16.5% appreciation and the Zacks Cable Television industry's 3.4% return [1] - RCI shares lagged peers like Netflix (NFLX), Apple (AAPL), and Disney (DIS), which appreciated 34.7%, 17.9%, and 13.8%, respectively, in the same period [1] Market Challenges - RCI's subpar performance attributed to intense market competition, declining cable revenues, and macroeconomic uncertainties [2] - Intense competition in the wireless market from major rivals like BCE, TELUS, and Videotron [3] - Struggles in the cable segment to retain customers and compete with other internet service providers, including smaller regional players and emerging technologies [4] - Cable revenues fell 1% year over year in Q3 2024 due to reductions in Home Phone and Satellite subscriber bases [4] - Macroeconomic uncertainties and shifting consumer spending patterns impacting demand for premium services like 5G and high-speed internet [5] Strategic Initiatives - Heavy investments in infrastructure and new technologies, including trials of DOCSIS 4 modems and Wi-Fi 7 routers [6] - Strategic agreement to buy Bell's 37.5% ownership stake in Maple Leaf Sports & Entertainment to bolster long-term prospects [6] Financial Estimates - Full-year 2024 total service revenue growth expected between 8% and 10%, with adjusted EBITDA growth of 12%-15% [7] - Zacks Consensus Estimate for Q4 2024 revenues pegged at $3.8 billion, indicating a year-over-year decline of 2.97$1.04 per share, down by a penny over the past 30 days, indicating year-over-year growth of 19.54% [7] - Zacks Consensus Estimate for 2024 revenues pegged at $14.69 billion, indicating year-over-year growth of 2.66$3.55 per share, down by a penny over the past 30 days, suggesting year-over-year growth of 5.34% [8] - RCI beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 3.87% [8] Investor Considerations - RCI's performance reflects significant challenges, including competitive pressure in the wireless market, declining cable revenues, and macroeconomic uncertainties [10] - RCI currently carries a Zacks Rank 5 (Strong Sell) [10]