Edward H. McKay, the Executive Vice President and Chief Operating Officer of Shenandoah Telecommunications Co. (NASDAQ:SHEN), has recently acquired 1,000 shares of the company's common stock. The shares were purchased at a price of $12.6733 each, totaling $12,673. Following this transaction, McKay holds a total of 75,369 shares in the company. This purchase reflects McKay's ongoing investment in the telecommunications company, which is based in Edinburg, Virginia.
In other recent news, Shenandoah Telecommunications Company (Shentel) has reported significant growth in its Q3 earnings, primarily driven by its Glo Fiber service and the integration of former Horizon markets. The company's revenue surged by 30% to $87.6 million, and adjusted EBITDA grew by 31% to $26.6 million. Additionally, Shentel's Glo Fiber service added a record 6,000 net subscribers, reaching over 59,000 customers.
Integration of Horizon is progressing well, with increased synergy savings target of $11 million expected by Q2 2025. Shentel's broadband network now covers approximately 554,000 homes and businesses, with 59% served via fiber. The company maintains strong liquidity at $473 million, with a net leverage ratio of 2.8 times.
Despite a decrease in overall broadband data penetration to 47.5%, Shentel expects continued growth in the Glo Fiber service and plans to expand its customer base in unserved areas through government grants. The company also reported a 7 basis point year-over-year improvement in churn and a 2.9% year-over-year increase in Broadband data Average Revenue Per User (ARPU). These are recent developments highlighting Shentel's robust growth trajectory.
InvestingPro Insights
Edward H. McKay's recent acquisition of Shenandoah Telecommunications Co. (NASDAQ:SHEN) shares comes at a time when the company faces several financial challenges. According to InvestingPro data, SHEN's market capitalization stands at $697.27 million, with a price-to-book ratio of 0.75, indicating that the stock may be undervalued relative to its book value.
Despite McKay's confidence in the company, as demonstrated by his purchase, InvestingPro Tips highlight some concerning trends. The company is quickly burning through cash, and net income is expected to drop this year. Moreover, SHEN has not been profitable over the last twelve months, with an adjusted operating income of -$0.75 million for the same period.
On a positive note, SHEN has maintained dividend payments for 30 consecutive years, showcasing a commitment to shareholder returns. The current dividend yield stands at 0.79%, with a 25% dividend growth in the last twelve months. This long-standing dividend history may be a factor in McKay's decision to increase his stake in the company.
It's worth noting that analysts' fair value estimate for SHEN is $26 per share, significantly higher than the current trading price. This discrepancy could suggest potential upside, aligning with McKay's investment decision. However, investors should consider that the company's short-term obligations exceed its liquid assets, which may pose challenges in the near term.
For a more comprehensive analysis, InvestingPro offers 7 additional tips for SHEN, providing deeper insights into the company's financial health and prospects.
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