Uniti's Business Should Have Little Volatility, but High Debt Causes Very High Stock Uncertainty

Uniti’s business is dominated by its triple-net leases, which results in little variability in operating results. The firm’s lease with Windstream makes up nearly 75% of total revenue and 90% of EBITDA. Following Windstream’s bankruptcy in 2019, Uniti and Windstream renegotiated the lease, which has an initial term that runs through 2030. The renegotiation leaves Uniti with very stable and predictable financial results, but the firm has sought to grow and diversify. We doubt the non-Windstream business can become large enough to move the needle.