Is Uniti Group (UNIT) Fairly Priced After Recent Telecom Infrastructure Reassessment?

Simply Wall St.02-11 03:30

If you are wondering whether Uniti Group's current share price offers fair value or an opening for value hunters, looking past the headline moves and into how the market is actually pricing the ...

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The stock last closed at US$8.07, with returns of 7.3% over the past 30 days and 18.2% year to date, while the 1 year return of a 10.2% decline and 5 year return of a 48.2% decline suggest a very different experience for longer term holders. Recent news flow around Uniti Group has centered on its position in U.S. telecommunications infrastructure and investor reactions to changing expectations around that role. This helps explain why shorter term gains sit alongside weaker multi year returns. This mix of sentiment driven moves and longer run share price pressure frames the question of what the stock might be worth today. On Simply Wall St's 6 point valuation framework, Uniti Group currently scores 3 out of 6. Next we will look at how different valuation approaches arrive at that result, before finishing with an even more complete way to think about what the market might be pricing in.  Find out why Uniti Group's -10.2% return over the last year is lagging behind its peers. AdvertisementApproach 1: Uniti Group Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today using a required rate of return, to arrive at an estimate of what the equity might be worth per share. For Uniti Group, the model used is a 2 Stage Free Cash Flow to Equity approach, working with cash flows in US$. On a last twelve month basis, Uniti Group recorded free cash flow of $146.97 million, and the projection set includes a swing from negative free cash flows in the earlier forecast years to a projected free cash flow of $205.04 million in 2030. Beyond the explicit analyst period, Simply Wall St extrapolates further free cash flow estimates out to 2035 using its own assumptions. Pulling all of those projected cash flows together and discounting them back to today gives an estimated intrinsic value of about $8.03 per share. Against the recent share price of $8.07, that implies the stock is roughly 0.5% overvalued, effectively putting it in the “close enough” bucket rather than clearly cheap or clearly expensive. Result: ABOUT RIGHT Uniti Group is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. UNIT Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Uniti Group. Approach 2: Uniti Group Price vs Earnings For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. This makes it a common anchor for how many investors look at value. What counts as a “normal” P/E usually depends on how fast earnings are expected to grow and how risky those earnings are. Higher growth or lower risk can justify a higher P/E, while slower growth or higher risk tends to line up with a lower P/E. Uniti Group is currently trading on a P/E of 1.22x. That sits well below the wider Telecom industry average P/E of 16.87x and also below the peer group average of 9.37x. Simply Wall St’s Fair Ratio for Uniti Group is 3.31x, which is its own estimate of a suitable P/E for this business. The Fair Ratio is designed to be more tailored than a simple peer or industry comparison because it factors in items like earnings growth, profit margins, risk profile, industry and market cap, rather than assuming all Telecom stocks deserve the same multiple. Comparing the current P/E of 1.22x with the Fair Ratio of 3.31x suggests the shares trade below that proprietary estimate of fair value. Result: UNDERVALUED NasdaqGS:UNIT P/E Ratio as at Feb 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 22 top founder-led companies. Upgrade Your Decision Making: Choose your Uniti Group Narrative Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, which let you connect your view of Uniti Group’s story to a set of revenue, earnings and margin assumptions, turn those into a fair value, and then compare that fair value with the current share price to decide how you want to act. In practice, a Narrative is your short, plain English explanation of what you think will happen to the business, linked directly to a forecast and valuation model that sits inside the Community page and updates automatically when fresh information like earnings or news is added. Because different investors can see the same facts in very different ways, Uniti Group already has Narratives that span from a more optimistic fair value of about US$10.77 per share to a more cautious view of roughly US$4.07 per share. You can place yourself anywhere along that spectrum or create your own version. For Uniti Group, we’ll make it really easy for you with previews of two leading Uniti Group Narratives: These sit at different points on the optimism spectrum, so you can quickly see which set of assumptions feels closer to your own view before you build or tweak your own Narrative. 🐂 Uniti Group Bull Case Fair value in this bullish Narrative: US$10.77 per share Current price vs this fair value: about 25.1% below the Narrative fair value Revenue growth assumption in this Narrative: 32.44% a year  Assumes AI infrastructure, hyperscaler demand and rural fiber exposure steadily lift recurring revenue from Uniti Group’s network footprint. Sees balance sheet simplification and financing efficiency as important drivers for better free cash flow and higher margins over time. Recognizes meaningful risks around tenant concentration, leverage and competing network technologies that could limit how these benefits play out.  🐻 Uniti Group Bear Case Fair value in this more cautious Narrative: US$7.37 per share Current price vs this fair value: about 9.5% above the Narrative fair value Revenue growth assumption in this Narrative: 31.71% a year  Assumes fiber expansion and hyperscaler contracts support higher quality recurring revenue, but sets a lower fair value than the bullish view. Highlights the drag from legacy revenue lines, high capital spending and leverage as key constraints on earnings and cash flow. Flags customer concentration and policy or regulatory changes as important swing factors for future margins and valuation.  If you want to go beyond these snapshots and really pressure test your own view against the market, Curious how numbers become stories that shape markets? Explore Community Narratives can help you see how other investors are joining the dots on Uniti Group’s story. Do you think there's more to the story for Uniti Group? Head over to our Community to see what others are saying! NasdaqGS:UNIT 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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