LBRDK: AI Flags Bearish Options Trade on Liberty Broadband

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LBRDK's technical outlook is strongly bearish. The price has experienced a significant decline over the past 90 days, dropping from approximately $92.10 on June 30th to $50.90 as of November 4th. The price is well below its 50-day SMA, which is currently at $60.06, and its 200-day SMA at $77.38, confirming a strong downtrend. Momentum indicators also reflect bearish sentiment. The RSI is extremely low at 26.11, indicating oversold conditions, but the strong downtrend suggests this may persist. The MACD is negative (-2.25), and trending further below its signal line (-1.67), reinforcing the bearish momentum. The ADX is elevated at 29.27, signaling a strong trend, and the negative ROC20 at -21.22 further confirms the strength of the downtrend. While the STOCHk is low at 21.31, it's not enough to counter the prevailing negative signals. Given these factors, a further decline is likely over the next 1-3 months.

The Liberty Broadband earnings call presents a mixed but slightly positive outlook, primarily driven by GCI's strong performance. While the pending acquisition by Charter looms, the focus remains on GCI's operations. Ron Duncan highlighted that the 'first quarter of 2025 was GCI's best quarter ever,' with revenue up 9% and adjusted OIBDA up 23%. This growth was fueled by data revenue and business services, particularly in rural Alaska's healthcare and education sectors. However, GCI Consumer experienced declines in both wireless and cable modem subscribers, attributed to competition and the termination of the ACP program. The fiber break impacted consumer services, but enterprise services were largely restored. GCI refinanced its credit facility, extending maturities at attractive rates. Capital spending is elevated due to Alaska Plan build-out requirements. While there's some competition from Starlink, GCI hasn't experienced the same level of competitive pressure as companies in the lower 48 states. The successful connection of Bethel with fiber represents a major milestone. Overall, the call suggests a moderately bullish outlook for GCI, balanced by the ongoing acquisition process and some challenges in the consumer segment.

LBRDK's financial performance presents a concerning picture. While revenue has shown some growth, increasing from $240M in Q3 2023 to $261M in Q2 2025, this growth is overshadowed by other factors. Most notably, the company's gross profit ratio has fluctuated significantly and is at 0% for the latest quarter. Operating cash flow has been volatile, with the most recent quarter showing a positive $91M, but prior quarters indicate inconsistency. A major red flag is the substantial increase in total debt, which has surged from $3.791B in Q3 2024 to $92.329B in Q2 2025. The income statement also shows that interest expense has remained consistently high, around $40-50M per quarter, which could strain future profitability given the massive increase in debt. Overall, the increased debt and inconsistent profitability raise significant concerns about LBRDK's financial stability and future performance.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting efficient cost management. Return on Equity (ROE) has shown positive movement, signaling enhanced profitability and efficient use of shareholder equity. The Price-to-Earnings (P/E) ratio, while elevated, might be justifiable given the growth trajectory and positive ROE trend. The Debt-to-Equity ratio shows a slight increase, which warrants monitoring, but is counterbalanced by a healthy Current Ratio, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable picture with growth and profitability, though the leverage should be watched closely. The combination of growth and profitability suggests potential for continued positive performance over the next 12 months.