Charter Communications Stock in Brief

Now trading at a price of $276.01, Charter Communications has moved 4.6% so far today.

Charter Communications returned losses of -21.9% last year, with its stock price reaching a high of $458.3 and a low of $236.08. Over the same period, the stock underperformed the S&P 500 index by -48.4%. AThe company's 50-day average price was $276.08. Charter Communications, Inc. operates as a broadband connectivity and cable operator company serving residential and commercial customers in the United States. Based in Stamford, CT, the Large-Cap Telecommunications company has 101,100 full time employees. Charter Communications has not offered a dividend during the last year.

The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:

2018 2019 2020 2021 2022 2023
Revenue (M) $43,634 $45,764 $48,097 $51,682 $54,022 $54,607
Operating Margins 12% 14% 17% 20% 22% 23%
Net Margins 3% 4% 7% 9% 9% 8%
Net Income (M) $1,230 $1,668 $3,222 $4,654 $5,055 $4,557
Net Interest Expense (M) -$3,540 -$3,797 -$3,848 -$4,037 -$4,556 -$5,188
Depreciation & Amort. (M) $10,318 $9,926 $9,704 $9,345 $8,903 $8,696
Diluted Shares (M) 230 218 212 193 164 152
Earnings Per Share $5.22 $7.45 $15.4 $24.47 $30.74 $29.99
EPS Growth n/a 42.72% 106.71% 58.9% 25.62% -2.44%
Avg. Price $314.05 $392.79 $556.45 $685.17 $534.78 $274.71
P/E Ratio 59.37 51.68 35.11 27.04 17.09 9.0
Free Cash Flow (M) $2,642 $4,553 $7,147 $8,604 $5,549 $3,318
CAPEX (M) $9,125 $7,195 $7,415 $7,635 $9,376 $11,115
EV / EBITDA 9.42 9.83 10.52 10.68 8.63 6.54
Total Debt (M) $76,117 $82,578 $83,760 $94,558 $99,113 $99,777
Net Debt / EBITDA 4.86 4.81 4.57 4.73 4.72 4.66
Current Ratio 0.23 0.52 0.4 0.29 0.33 0.31

Charter Communications has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and decent operating margins with a positive growth rate. However, the firm suffers from not enough current assets to cover current liabilities because its current ratio is 0.31 and a highly leveraged balance sheet. Finally, we note that Charter Communications has positive cash flows.

a Very Low P/E Ratio but Its Shares Are Expensive:

Charter Communications has a trailing twelve month P/E ratio of 8.9, compared to an average of 23.78 for the Telecommunications sector. Based on its EPS guidance of $34.0, the company has a forward P/E ratio of 8.1. According to the 30.7% compound average growth rate of Charter Communications's historical and projected earnings per share, the company's PEG ratio is 0.29. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 16.9%. On this basis, the company's PEG ratio is 0.53. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Charter Communications in terms of its equity because its P/B ratio is 3.35 whereas the sector average is 3.46. The company's shares are currently trading 24.4% below their Graham number.

There's an Analyst Consensus of Some Upside Potential for Charter Communications:

The 20 analysts following Charter Communications have set target prices ranging from $220.0 to $660.0 per share, for an average of $334.76 with a hold rating. The company is trading -17.5% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Charter Communications has an above average percentage of its shares sold short because 12.5% of the company's shares are sold short. Institutions own 69.5% of the company's shares, and the insider ownership rate stands at 37.24%, suggesting a large amount of insider shareholders. The largest shareholder is Dodge & Cox Inc, whose 6% stake in the company is worth $2,318,482,512.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.