3 Stocks to Watch From a Prospering 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 Naspers NPSNY, Charter Communications CHTR and Cable One CABO.

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. 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. 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. 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 Bright Prospects

The Zacks Cable Television industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #88, which places it in the top 36% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all 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 top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. 

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 20.1% over this period compared with the broader sector’s decrease of 5.3%. The S&P 500 has risen 17% in the said 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 6.7X compared with the S&P 500’s 17.8X and the sector’s 10.07X.

Over the past five years, the industry has traded as high as 16.34X, as low as 6.13X and at the median of 7.67X, as the chart below shows.

EV/EBITDA Ratio (TTM)

3 Cable Stocks to Watch

Naspers: Naspers enters 2026 on a solid fundamental footing. First half of the financial year ending March 31, 2026 (1H26) results revealed a 71% surge in ecommerce profitability, alongside record revenues and free cash flow — with every operated business now profitable. The company is firmly on track to deliver its $1.1 billion-plus adjusted EBITDA guidance for the full year. PayU, its fintech arm, has turned profitable and is accelerating ecosystem synergies across India and Latin America. The ongoing open-ended share repurchase program, actively executed through January and February 2026 per company announcements, continues to create meaningful shareholder value. iFood's dominance in Brazil and the strategic integration of Just Eat Takeaway strengthen the group's growth runway. As an AI-first organization deploying 20,000 AI agents, Naspers is structurally positioned to compound growth across its diversified global Internet ecosystem.

Shares of this Zacks Rank #2 (Buy) company have declined 12.2% in the past six-month period. The consensus mark for fiscal 2026 earnings has been revised upward by 1.1% to 89 cents per share in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price and Consensus: NPSNY

Charter Communications: This Zacks Rank #3 (Hold) is building a compelling growth story rooted in product innovation and strategic scale. The February 2026 launch of Spectrum's Invincible WiFi — the industry's first WiFi 7 service bundled with battery backup and 5G cellular failover — meaningfully elevates Charter's broadband value proposition, directly addressing churn and competitive pressure. Complementing this, January 2026 saw the rollout of WiFi 7 extenders, enhancing in-home coverage monetization. Mobile momentum remains robust, with 428,000 net line additions in fourth-quarter 2025, reinforcing the broadband-plus-mobile bundle strategy. Charter's proactive January 2026 debt refinancing, raising $3 billion in senior notes, strengthens balance sheet flexibility. The pending Cox Communications acquisition promises significant scale expansion. Together, these fundamental catalysts position CHTR for meaningful operational recovery in 2026.

Charter Communications shares have decreased 13.6% in the past six-month period. The Zacks Consensus Estimate for 2026 earnings has been revised upward by 2.2% to $43.79 per share in the past 60 days.

Price and Consensus: CHTR

Cable One: This Zacks Rank #3 company is poised for meaningful growth in 2026, driven by a series of strategic actions that strengthen its competitive foundation. In January 2026, the company announced a definitive agreement to acquire full ownership of Mega Broadband Investments (Vyve Broadband), adding approximately $310 million in annual revenues, 210,000 customers, and 675,000 passings across 16 states. This deal deepens Cable One's rural broadband presence and unlocks meaningful operational efficiencies at scale. Simultaneously, the company's Clearwave Fiber interest transitions into a minority stake in the newly scaled Point Broadband platform, streamlining the portfolio. Adding further momentum, accomplished broadband veteran Jim Holanda assumed the CEO role in February 2026, bringing over 35 years of industry expertise and a clear mandate to accelerate growth and innovation.
Cable One shares have plunged 31.4% in the past six-month period. The Zacks Consensus Estimate for CABO’s 2026 earnings has remained steady at $29.69 per share in 60 days.

Price and Consensus: CABO

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This article originally published on Zacks Investment Research (zacks.com).

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