2 Stocks to Watch From a Challenging Cable Television Industry

Industry Overview - The Zacks Cable Television industry is adapting to challenges from cord-cutting by focusing on bundled offerings and on-demand programming to remain relevant in the evolving media landscape [1] - Companies in this industry provide integrated data, video, and voice services, requiring significant investment in infrastructure and compliance with regulations [2] Trends Impacting the Industry - The shift towards skinny bundles and original content is driving growth, as cable companies adapt to consumer preferences for digital and subscription services [3] - High demand for high-speed internet is a key catalyst for growth, with trends like remote work and online learning boosting internet usage [4] - The industry faces challenges from cord-cutting and rising programming costs, making it difficult for traditional companies to maintain profitability [5] Advertising and Market Performance - Softness in advertising demand due to inflation and competition from digital marketing is impeding business growth for cable companies [6] - The Zacks Cable Television industry has underperformed compared to the broader Consumer Discretionary sector and the S&P 500, declining 41.3% over the past year [11] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 6.3X, significantly lower than the S&P 500's 18.25X and the sector's 10.17X [14] Company Highlights - Naspers, with a 26% stake in Tencent, is positioned for near-term upside due to regulatory support and a focus on operational efficiency, with shares up 52.1% year-to-date [17][18] - WideOpenWest is focusing on fiber network expansion and operational improvements, with shares returning 3.8% year-to-date, although its loss estimate for 2025 has widened [21][22]