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3 Stocks to Watch From a Challenging Cable Television Industry
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The Zacks Cable Television industry players are focusing on bundled offerings and on-demand programming to counter challenges from cord-cutting as consumers shift away from traditional pay-TV options, including cable TV and satellite TV, to over-the-top streaming services with innovative content. The industry is evolving by leveraging its broadband infrastructure to meet changing consumer preferences and balancing traditional cable services with new streaming options to maintain relevance in the rapidly changing media landscape. Cable companies are benefiting from consistent demand for high-speed broadband and WiFi devices, driven by hybrid work and learning environments. Increased media consumption has been a key catalyst for industry leaders like Comcast (CMCSA - Free Report) , Charter Communications (CHTR - Free Report) and Cable One (CABO - Free Report) .
Industry Description
The Zacks Cable Television industry comprises companies offering integrated data, video and voice services, including pay-TV and Internet-based streaming content. These firms provide equipment like satellite dishes, digital set-top receivers and remote controls. Cable companies typically build or lease network backbones from telecom companies and purchase licenses to distribute programmers' content over these networks. They license content from programmers and sell advertising spots. The industry is capital-intensive, requiring significant investment in infrastructure and is heavily regulated by the Federal Communications Commission. Industry players must balance the need for ongoing investment in technology and infrastructure with evolving consumer preferences and regulatory compliance to maintain competitiveness in the media landscape.
4 Trends Shaping the Future of the Cable Industry
Skinny Bundles, Original Content Driving Growth: Cable television’s ability to generate ad revenues outside traditional TV platforms, such as websites and any digitally consumed platform, provides increased scope for target-based advertising. Nevertheless, consumers’ unfavorable disposition, particularly toward advertising, has hit industry participants hard. Further, the growing consumer preference for digital and subscription services instead of linear pay-TV and rental or outright purchase has compelled industry players to alter their business models. Cable television companies are now offering a variety of alternative packages, including skinny bundles, which are delivered at lower costs than traditional offerings. These companies are also innovating in terms of original content to be competitive against streaming service providers.
High-Speed Internet Demand Key Catalyst: The growing demand for high-speed Internet, including broadband, has aided cable television industry participants like Comcast and Charter. Improving Internet speed is fueling the demand for high-quality video and the trend of binge viewing. Further, a strengthening broadband ecosystem in international markets, along with the proliferation of smart TVs, is anticipated to drive growth. Also, the work-from-home trend and online learning have boosted Internet usage, thus supporting industry participants.
Cord Cutting and Matured PayTV Industry Hurting Prospects: The cable television industry is witnessing the rapid evolution of distribution platforms as well as embracing new players and advanced technologies. Declining profits of residential video services due to rising programming costs and retransmission fees have made survival difficult for traditional companies. Additionally, the heightened need for on-demand content has led to the mushrooming of streaming service providers, making it particularly tricky for traditional cable television companies to maintain a viewer base. Furthermore, the traditional pay-TV industry is maturing with widespread consolidation. Moreover, residential voice service revenues are declining due to the rising shift to wireless voice services.
Softness in Advertising Demand Impeding Business Growth: Persistent inflation and higher interest rates are having a detrimental effect on ad spending. Besides, the challenge with TV ads is that marketers have difficulty getting actionable metrics and insights such as attribution data. At this time, marketers must look for outside-the-box solutions to extract conversion data from offline media. TV has taken a secondary role in most marketing strategies due to the growing influence of digital marketing. Many marketers are increasing ad spending on digital media due to their unmatched ability to deliver personalized messages that are easy to measure. Cable TV players are set to face competition for ad dollars from streaming service providers like Netflix and Disney, which are raising prices and introducing cheaper ad-supported packages now that their subscriber growth has slowed.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Cable Television industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #216, which places it in the bottom 13% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries results from a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Oct. 31, 2025, the industry’s earnings estimates for 2026 have moved down by 14.1%.
Despite the gloomy industry outlook, a few stocks are worth watching, as these have the potential to outperform the market based on a strong earnings outlook. But before we present such stocks, it is worth first looking at the industry’s shareholder returns and current valuation.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Lags Sector, S&P 500
The Zacks Cable Television industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.
The industry has declined 22.5% over this period compared with the broader sector’s decline of 12.1%. The S&P 500 has risen 9.9% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing cable companies, we see that the industry is currently trading at 4.63X compared with the S&P 500’s 16.29X and the sector’s 8.84X.
Over the past five years, the industry has traded as high as 13.38X, as low as 4.4X and at the median of 7.19X, as the chart below shows.
EV/EBITDA Ratio (TTM)
3 Cable Stocks to Watch
Comcast’s near-term case rests on structural execution. The proposed separation of NBCUniversal and Sky into two independent companies, each targeting strong investment-grade ratings, remains on track for mid-2027, while a fourth-quarter transformation charge above $1 billion targets organizational redesign and cost reduction. Wireless is expected to deliver its best net-add year in company history, with 10.6 million lines and substantial runway across the broadband base. Peacock, at 48 million paid subscribers, is expected to remain profitable annually, with a YouTube Premium bundle planned. Management anticipates slight improvement in Connectivity and Platforms in the fourth quarter, though Orlando theme park softness should persist through the first half of 2027. A quarterly dividend of 33 cents, payable Jan. 27, 2027, continues while buybacks remain paused.
Shares of this Zacks Rank #3 (Hold) company have lost 22.3% year to date. The Zacks Consensus Estimate for Comcast’s 2026 earnings has moved north by 1.7% to $3.54 per share in the past 30 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. .
Price and Consensus: CMCSA
Charter’s near-term setup hinges on integrating Cox. Spectrum’s full product suite reached former Cox markets in September, extending its reach to more than 70 million homes and businesses across 45 states, with more than five million former Cox customers now able to join. Mobile lines from $30 per line monthly, a free year of Spectrum Mobile for eligible Internet customers and a savings guarantee above $1,000 for bundlers could support broadband and mobile line additions. Commitments such as 24/7 service, same-day technician dispatch and outage credits aim to limit churn. Watch items include integration execution, the CFO transition effective Oct. 15 under interim CFO Kevin Howard, and Nov. 6 third-quarter results. Management has also kept its previously provided financial outlook unchanged.
This Zacks Rank #3 company’s shares have lost 46.6% year to date. The consensus mark for 2026 earnings has remained steady at $42.92 per share in the past 30 days.
Price and Consensus: CHTR
Cable One’s near-term trajectory hinges on balance-sheet repair and the pending Mega Broadband purchase. In October, the company reported agreement in principle on financing transactions with GTCR, existing lenders and private lenders. These are expected to extend and reduce the revolving credit facility, settle the put tied to the remaining 55% of Mega Broadband and fully repay the B-4 term loan, addressing $2.45 billion of current obligations while providing liquidity for investment and strategic plans. However, a temporary restraining order currently prohibits closing the acquisition, and definitive financing agreements remain unsigned. Operationally, Sparklight is expanding Multi-Gig service, with Springhill, Louisiana, residential plans reaching up to 2 Gig.
This Zacks Rank #3 company’s shares have plunged 95.1% year to date. The consensus mark for 2026 earnings has remained steady at $32.39 per share in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
3 Stocks to Watch From a Challenging Cable Television Industry
The Zacks Cable Television industry players are focusing on bundled offerings and on-demand programming to counter challenges from cord-cutting as consumers shift away from traditional pay-TV options, including cable TV and satellite TV, to over-the-top streaming services with innovative content. The industry is evolving by leveraging its broadband infrastructure to meet changing consumer preferences and balancing traditional cable services with new streaming options to maintain relevance in the rapidly changing media landscape. Cable companies are benefiting from consistent demand for high-speed broadband and WiFi devices, driven by hybrid work and learning environments. Increased media consumption has been a key catalyst for industry leaders like Comcast (CMCSA - Free Report) , Charter Communications (CHTR - Free Report) and Cable One (CABO - Free Report) .
Industry Description
The Zacks Cable Television industry comprises companies offering integrated data, video and voice services, including pay-TV and Internet-based streaming content. These firms provide equipment like satellite dishes, digital set-top receivers and remote controls. Cable companies typically build or lease network backbones from telecom companies and purchase licenses to distribute programmers' content over these networks. They license content from programmers and sell advertising spots. The industry is capital-intensive, requiring significant investment in infrastructure and is heavily regulated by the Federal Communications Commission. Industry players must balance the need for ongoing investment in technology and infrastructure with evolving consumer preferences and regulatory compliance to maintain competitiveness in the media landscape.
4 Trends Shaping the Future of the Cable Industry
Skinny Bundles, Original Content Driving Growth: Cable television’s ability to generate ad revenues outside traditional TV platforms, such as websites and any digitally consumed platform, provides increased scope for target-based advertising. Nevertheless, consumers’ unfavorable disposition, particularly toward advertising, has hit industry participants hard. Further, the growing consumer preference for digital and subscription services instead of linear pay-TV and rental or outright purchase has compelled industry players to alter their business models. Cable television companies are now offering a variety of alternative packages, including skinny bundles, which are delivered at lower costs than traditional offerings. These companies are also innovating in terms of original content to be competitive against streaming service providers.
High-Speed Internet Demand Key Catalyst: The growing demand for high-speed Internet, including broadband, has aided cable television industry participants like Comcast and Charter. Improving Internet speed is fueling the demand for high-quality video and the trend of binge viewing. Further, a strengthening broadband ecosystem in international markets, along with the proliferation of smart TVs, is anticipated to drive growth. Also, the work-from-home trend and online learning have boosted Internet usage, thus supporting industry participants.
Cord Cutting and Matured PayTV Industry Hurting Prospects: The cable television industry is witnessing the rapid evolution of distribution platforms as well as embracing new players and advanced technologies. Declining profits of residential video services due to rising programming costs and retransmission fees have made survival difficult for traditional companies. Additionally, the heightened need for on-demand content has led to the mushrooming of streaming service providers, making it particularly tricky for traditional cable television companies to maintain a viewer base. Furthermore, the traditional pay-TV industry is maturing with widespread consolidation. Moreover, residential voice service revenues are declining due to the rising shift to wireless voice services.
Softness in Advertising Demand Impeding Business Growth: Persistent inflation and higher interest rates are having a detrimental effect on ad spending. Besides, the challenge with TV ads is that marketers have difficulty getting actionable metrics and insights such as attribution data. At this time, marketers must look for outside-the-box solutions to extract conversion data from offline media. TV has taken a secondary role in most marketing strategies due to the growing influence of digital marketing. Many marketers are increasing ad spending on digital media due to their unmatched ability to deliver personalized messages that are easy to measure. Cable TV players are set to face competition for ad dollars from streaming service providers like Netflix and Disney, which are raising prices and introducing cheaper ad-supported packages now that their subscriber growth has slowed.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Cable Television industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #216, which places it in the bottom 13% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries results from a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Oct. 31, 2025, the industry’s earnings estimates for 2026 have moved down by 14.1%.
Despite the gloomy industry outlook, a few stocks are worth watching, as these have the potential to outperform the market based on a strong earnings outlook. But before we present such stocks, it is worth first looking at the industry’s shareholder returns and current valuation.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Lags Sector, S&P 500
The Zacks Cable Television industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.
The industry has declined 22.5% over this period compared with the broader sector’s decline of 12.1%. The S&P 500 has risen 9.9% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing cable companies, we see that the industry is currently trading at 4.63X compared with the S&P 500’s 16.29X and the sector’s 8.84X.
Over the past five years, the industry has traded as high as 13.38X, as low as 4.4X and at the median of 7.19X, as the chart below shows.
EV/EBITDA Ratio (TTM)
3 Cable Stocks to Watch
Comcast’s near-term case rests on structural execution. The proposed separation of NBCUniversal and Sky into two independent companies, each targeting strong investment-grade ratings, remains on track for mid-2027, while a fourth-quarter transformation charge above $1 billion targets organizational redesign and cost reduction. Wireless is expected to deliver its best net-add year in company history, with 10.6 million lines and substantial runway across the broadband base. Peacock, at 48 million paid subscribers, is expected to remain profitable annually, with a YouTube Premium bundle planned. Management anticipates slight improvement in Connectivity and Platforms in the fourth quarter, though Orlando theme park softness should persist through the first half of 2027. A quarterly dividend of 33 cents, payable Jan. 27, 2027, continues while buybacks remain paused.
Shares of this Zacks Rank #3 (Hold) company have lost 22.3% year to date. The Zacks Consensus Estimate for Comcast’s 2026 earnings has moved north by 1.7% to $3.54 per share in the past 30 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. .
Price and Consensus: CMCSA
Charter’s near-term setup hinges on integrating Cox. Spectrum’s full product suite reached former Cox markets in September, extending its reach to more than 70 million homes and businesses across 45 states, with more than five million former Cox customers now able to join. Mobile lines from $30 per line monthly, a free year of Spectrum Mobile for eligible Internet customers and a savings guarantee above $1,000 for bundlers could support broadband and mobile line additions. Commitments such as 24/7 service, same-day technician dispatch and outage credits aim to limit churn. Watch items include integration execution, the CFO transition effective Oct. 15 under interim CFO Kevin Howard, and Nov. 6 third-quarter results. Management has also kept its previously provided financial outlook unchanged.
This Zacks Rank #3 company’s shares have lost 46.6% year to date. The consensus mark for 2026 earnings has remained steady at $42.92 per share in the past 30 days.
Price and Consensus: CHTR
Cable One’s near-term trajectory hinges on balance-sheet repair and the pending Mega Broadband purchase. In October, the company reported agreement in principle on financing transactions with GTCR, existing lenders and private lenders. These are expected to extend and reduce the revolving credit facility, settle the put tied to the remaining 55% of Mega Broadband and fully repay the B-4 term loan, addressing $2.45 billion of current obligations while providing liquidity for investment and strategic plans. However, a temporary restraining order currently prohibits closing the acquisition, and definitive financing agreements remain unsigned. Operationally, Sparklight is expanding Multi-Gig service, with Springhill, Louisiana, residential plans reaching up to 2 Gig.
This Zacks Rank #3 company’s shares have plunged 95.1% year to date. The consensus mark for 2026 earnings has remained steady at $32.39 per share in the past 30 days.
Price and Consensus: CABO