Charter Communications logged a -0.3% change during today's morning session, and is now trading at a price of $351.54 per share.
Charter Communications returned losses of -7.7% last year, with its stock price reaching a high of $415.27 and a low of $236.08. Over the same period, the stock underperformed the S&P 500 index by -31.1%. AThe company's 50-day average price was $368.13. 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.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 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 | $348.53 |
| P/E Ratio | 59.37 | 51.68 | 35.11 | 27.04 | 17.09 | 11.41 |
| 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 | 7.04 |
| 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, strong operating margins with a positive growth rate, and exceptional EPS growth. 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 Trades Above Its Graham Number:
Charter Communications has a trailing twelve month P/E ratio of 11.5, compared to an average of 20.57 for the Telecommunications sector. Based on its EPS guidance of $35.78, the company has a forward P/E ratio of 10.3. According to the 31.7% compound average growth rate of Charter Communications's historical and projected earnings per share, the company's PEG ratio is 0.36. 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 17.2%. On this basis, the company's PEG ratio is 0.67. This suggests that its shares are undervalued. In contrast, Charter Communications is likely overvalued compared to the book value of its equity, since its P/B ratio of 3.55 is higher than the sector average of 2.36. The company's shares are currently trading 58.4% below their Graham number.
Charter Communications Has an Average Rating of Hold:
The 24 analysts following Charter Communications have set target prices ranging from $292.0 to $525.0 per share, for an average of $405.44 with a hold rating. The company is trading -13.3% 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 12.0% of the company's shares are sold short. Institutions own 72.1% of the company's shares, and the insider ownership rate stands at 36.67%, suggesting a large amount of insider shareholders. The largest shareholder is Dodge & Cox Inc, whose 8% stake in the company is worth $4,090,977,596.
