Over the past six months, WideOpenWest has been a great trade, beating the S&P 500 by 8.6%. Its stock price has climbed to $5.19, representing a healthy 23% increase. This performance may have investors wondering how to approach the situation.

Is now the time to buy WideOpenWest, or should you be careful about including it in your portfolio? Get the full breakdown from our expert analysts, it’s free for active Edge members.

Why Do We Think WideOpenWest Will Underperform?

We’re glad investors have benefited from the price increase, but we're sitting this one out for now. Here are three reasons there are better opportunities than WOW and a stock we'd rather own.

1. Decline in Subscribers Points to Weak Demand

Revenue growth can be broken down into changes in price and volume (for companies like WideOpenWest, our preferred volume metric is subscribers). While both are important, the latter is the most critical to analyze because prices have a ceiling.

WideOpenWest’s subscribers came in at 464,500 in the latest quarter, and over the last two years, averaged 5.2% year-on-year declines. This performance was underwhelming and implies there may be increasing competition or market saturation. It also suggests WideOpenWest might have to lower prices or invest in product improvements to grow, factors that can hinder near-term profitability.

2. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, WideOpenWest’s ROIC averaged 2.5 percentage point decreases each year. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

3. Short Cash Runway Exposes Shareholders to Potential Dilution

As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.

WideOpenWest burned through $72.1 million of cash over the last year, and its $1.09 billion of debt exceeds the $22.9 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

Unless the WideOpenWest’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.

We remain cautious of WideOpenWest until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.

Final Judgment

We see the value of companies helping consumers, but in the case of WideOpenWest, we’re out. With its shares beating the market recently, the stock trades at 1.7× forward EV-to-EBITDA (or $5.19 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. There are superior stocks to buy right now. We’d suggest looking at one of our top software and edge computing picks.

Stocks We Like More Than WideOpenWest

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

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