CGO reported an EPS of $2.40, beating the estimate of $2.18, while revenue came at $758 million, a 2.4% decrease compared to last year (3.9% on a constant currency basis) due to the decline in the subscriber base. Adjusted EBITDA decreased slightly by 0.5% to $367.8 million. CGO reports fine results, but the market is concerned with the fact that revenue declined by around 3.9% on a constant currency basis for the quarter and the company also revised its projection, expecting revenue to decline by low single digits, compared to the previous projection of flat. The stock is cheap, and a stable cash cow with and attractive dividend yield. The company generates significant free cash flow, but the long-term growth prospects of the business are not overly attractive and are expected to gradually decline by 1%-2% over the next few years. For now, we think investors can give CGO some time to execute and be willing to sell if revenue continues its downward trend. The dividend is fine and good for income-focused investors, but otherwise there are better growth opportunities elsewhere.
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