Charter Communications
CHTR
$136.31
+1.68%
Charter Communications is the second-largest US cable operator, delivering broadband internet, video, voice, and mobile services under the Spectrum brand to roughly 29 million residential and 2 million commercial customer accounts across a footprint covering about 59 million homes and businesses, supplemented by owned regional sports and news networks and a pending acquisition of Cox Communications. The company is a scaled incumbent infrastructure owner rather than a disruptor, with its competitive identity built on a hybrid fiber-coaxial network, aggressive bundling of mobile with broadband, and a long history of debt-funded capital returns via buybacks. The current investor narrative is dominated by the secular threat of 5G fixed wireless access and satellite broadband (Starlink) eroding the core internet subscriber base, a theme crystallized by a roughly 27% single-month share price collapse in September 2026 tied to rising rates, a heavily levered balance sheet, and competitive share loss. That bear case is now being contested by a violent November rebound, with bulls pointing to deep value multiples, substantial free cash flow, and mobile line growth as an offset to broadband attrition, while the pending Cox deal adds both scale opportunity and integration and regulatory risk to the debate.…
CHTR
Charter Communications
$136.31
Related headlines
Investment Opinion: Should I buy CHTR Today?
Rating: Hold. Charter is a deeply discounted, cash-generative cable incumbent whose 5.66x trailing and 3.27x forward PE, 0.52x sales, and 5.89x EV/EBITDA already price in substantial broadband erosion, while the $170.44 average analyst target implies +27.1% upside and the consensus recommendation sits at 3.0 (hold) with 5 Buy, 10 Hold, and 6 Sell. The core thesis is that the stock is cheap enough to compensate for structural risk but lacks the demonstrated subscriber stabilization needed to justify a Buy, so the risk/reward is balanced rather than compelling.
Supporting evidence is genuinely two-sided: TTM free cash flow of $3.93 billion covers the $1.34 billion quarterly interest bill with room to spare, operating margin of 24.36% and ROE of 31.06% show the core business still earns, and Q3 revenue of $14.92 billion grew 9.14% year-over-year. Against that, Q3 swung to a -$2.40 billion net loss and -$20.50 EPS on a $4.43 billion non-cash charge, debt-to-equity is 6.05x with a 0.387 current ratio and only $599 million of cash, and the stock is down 36.30% over one year versus SPY's +10.05%, a -46.35 point relative gap. The 5.89x EV/EBITDA multiple versus a 7-9x cable/telecom norm is the entire bull case, and it only works if cash flows are not in permanent decline.
The biggest risks that could invalidate even a Hold are accelerating broadband losses to fixed wireless and Starlink, refinancing stress on the levered balance sheet if rates stay elevated, and a messy Cox integration. This Hold would upgrade to Buy if residential internet subscriber trends flatten for two consecutive quarters or if EV/EBITDA re-rates above roughly 7x on stable EBITDA, and it would downgrade to Sell on a decisive break below the $101.11 52-week low or if free cash flow falls below the ~$1.34 billion quarterly interest burden. On valuation, Charter is at or near the bottom of its own multi-year band (PS 0.52x versus 4.10x in Q2 2025 and 8.67x in Q4 2021), so it screens undervalued relative to history and peers, but the discount is a judgment on durability rather than a free lunch.
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CHTR 12-Month Price Forecast
Charter presents a classic deep-value-versus-structural-decline debate in which the numbers support neither an aggressive Buy nor a Sell. The 5.89x EV/EBITDA and 0.52x sales multiples are at the bottom of the stock's own multi-year band, and $3.93 billion of TTM free cash flow comfortably services the $1.34 billion quarterly interest bill, so the business is not broken even though Q3's -$2.40 billion net loss and -23.63% gross margin look alarming on the surface. The offsetting reality is that residential internet and video are under direct attack from fixed wireless and Starlink, the balance sheet carries 6.05x debt-to-equity with a 0.387 current ratio, and the Street's 10 Hold / 6 Sell split with a $68-$380 target range signals genuine disagreement about terminal value. The +29.68% one-month rally is a mean-reversion snapback against a -36.30% one-year decline, not yet a confirmed reversal, so the burden of proof remains on management. I would upgrade to bullish on two quarters of stabilizing broadband net adds or a Cox close with credible synergies, and downgrade to bearish on a break below $101.11 or free cash flow falling toward the interest burden.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Charter Communications's 12-month outlook, with a consensus price target around $170.50 and implied upside of +25.1% versus the current price.
Average Target
$170.50
21 analysts
Implied Upside
+25.1%
vs. current price
Analyst Count
21
covering this stock
Price Range
$68 - $380
Analyst target range
Coverage is broad with 18 analysts, but sentiment is decidedly mixed and leans cautious: 5 Buy, 10 Hold, and 6 Sell ratings produce a consensus recommendation of "hold" with a recommendation mean of 3.0 on a 1-5 scale. The average target price of $170.44 implies roughly +27.1% upside from the current $134.06, a meaningful gap that reflects how far the stock has fallen below where the Street models fair value, but the hold consensus signals that most analysts see the risk/reward as balanced rather than compelling. Estimated average EPS of $93.11 and average revenue of $60.80 billion for the forward period suggest the Street still models solid profitability, making the 3.27x forward PE look anomalously cheap if those estimates hold.
The target range is extraordinarily wide, from a low of $68.00 to a high of $380.00, a spread of more than 5.5x that screams high uncertainty and deep disagreement about the terminal value of the cable model. The $380 high target implicitly assumes multiple expansion back toward historical norms, successful Cox integration, mobile scaling, and broadband stabilization, while the $68 low target prices in accelerating subscriber losses, margin compression, and refinancing stress on the leveraged balance sheet. Recent institutional actions skew negative: Wolfe Research downgraded to Underperform from Peer Perform in September 2026, while Wells Fargo and Barclays maintain Underweight ratings and Morgan Stanley, JPMorgan, UBS, and RBC stay at neutral/equal-weight; only Citigroup (Buy, reiterated November 3) and TD Cowen (Buy) remain constructive. The pattern of downgrades into the September collapse and the persistence of underweight ratings despite the November bounce suggest the Street is not yet convinced the worst is over, and the wide dispersion argues for treating any single target as low-confidence.
Bulls vs Bears: CHTR Investment Factors
The bear case currently has stronger evidence: broadband subscriber losses from fixed wireless and Starlink are structural, the balance sheet carries 6.05x debt-to-equity with a 0.387 current ratio, and Q3 delivered a -$2.40 billion net loss. The bulls' case rests on valuation (5.89x EV/EBITDA, 0.52x sales) and cash flow ($3.93 billion TTM FCF) rather than on demonstrated business stabilization, and the 10 Hold / 6 Sell analyst split confirms the Street sees balanced-to-negative risk/reward. The single most important tension is whether broadband subscriber trends stabilize before the multiple can mean-revert — if management proves attrition is bottoming, a 5.89x EV/EBITDA multiple on stable cash flow is generational value; if losses accelerate, the value trap thesis wins and the $68 low target comes into play. The November +29.68% rally is encouraging but unproven against a -36.30% one-year decline, so the burden of proof remains on management.
Bullish
- Deep value at 5.89x EV/EBITDA: Charter trades at 5.89x EV/EBITDA and 0.52x sales versus a cable/telecom peer norm of roughly 7-9x EBITDA and 1.5-2.0x sales, a 65-75% discount on sales. With 24.36% operating margins and $3.93 billion of TTM free cash flow, the multiple arguably over-discounts structural risk. Every turn of EV/EBITDA re-rating is worth roughly 17% of enterprise value.
- Analyst target implies 27% upside: The $170.44 average target sits 27.1% above the $134.06 price, and the $380 high target implies 183% upside if multiples normalize. Even the consensus 'hold' rating (3.0 mean on 1-5) acknowledges the stock has fallen below modeled fair value. Citigroup reiterated Buy on November 3 and TD Cowen remains constructive.
- Free cash flow funds the leveraged model: TTM free cash flow of $3.93 billion (Q3 operating cash flow $4.03 billion less $3.03 billion capex) covers the $1.34 billion quarterly interest bill with room to spare. A 1.33x capex coverage ratio and 31.06% ROE show the core business still generates cash despite the Q3 headline loss.
- Violent November momentum reversal: The stock is up 29.68% in one month versus SPY's -3.68%, a +33.36 relative strength swing, including a +10.61% single session on 4.37 million shares. With a 5.47-day short ratio, part of the move is short covering, but the snapback off the $101.11 low shows buyers defending deep value.
Bearish
- Broadband attrition from FWA and Starlink: The core residential internet segment ($6.40 billion of Q3 revenue) is under direct assault from 5G fixed wireless and satellite broadband, and Charter has been missing estimates and losing internet subscribers. Residential video at $3.29 billion is also shrinking, and commercial ($2.25 billion) plus advertising ($0.46 billion) are too small to offset the losses.
- 6.05x leverage with 0.387 current ratio: Debt-to-equity of 6.05x, a current ratio of just 0.387, and only $599 million of cash against a multi-hundred-billion-dollar debt load leave almost no liquidity cushion. Interest expense of $1.34 billion per quarter consumes a large share of operating cash flow, and the 0.038 cash-flow-to-debt ratio means refinancing depends entirely on capital markets.
- Q3 swung to a $2.40 billion loss: Q3 2026 produced a net loss of -$2.40 billion and EPS of -$20.50, with gross margin of -23.63% versus 45.42% in Q2, driven by a $4.43 billion other non-cash charge and $2.62 billion of D&A. Even normalized, gross margin compressed from 46.15% in Q1 to 45.42% in Q2 as competition pressures pricing.
- Street leans cautious despite the bounce: Of 18 analysts, only 5 rate Buy against 10 Hold and 6 Sell, and Wolfe Research downgraded to Underperform in September 2026 while Wells Fargo and Barclays stay Underweight. The persistence of underweight ratings through the November rally suggests the Street is not convinced the worst is over.
CHTR Technical Analysis
Charter is in a pronounced, sustained downtrend that has only just begun to stabilize: the stock is down 36.30% over the trailing year and 35.94% year-to-date, a staggering 46.35 percentage points of relative underperformance versus the S&P 500's +10.05% over the same period. At $134.06, the shares sit at roughly 21.5% of the 52-week range (low $101.11 to high $254.11), having traded within about 33% of the absolute low as recently as late October. This positioning is characteristic of a broken momentum name rather than a healthy pullback, and the -63.86% max drawdown confirms the severity of the de-rating; the stock is only now attempting to build a base rather than confirming a durable bottom.
Short-term momentum has turned sharply positive and is diverging violently from the longer-term trend: the stock is up 29.68% over the past month and +10.61% on the latest session alone (from a $121.20 previous close to $134.06), producing a relative strength reading of +33.36 versus SPY's -3.68% one-month return. That one-month surge stands in stark contrast to the -10.76% three-month and -9.42% six-month changes, a classic mean-reversion snapback off an oversold extreme rather than a confirmed trend reversal. The move is occurring on elevated volume of roughly 4.37 million shares, and with a short ratio of 5.47 days-to-cover, part of the rally likely reflects short covering; the divergence between the +29.68% one-month gain and the -36.30% one-year decline signals a high-beta bounce that still needs to prove itself against the dominant downtrend.
Key technical levels are well defined: support sits at the 52-week low of $101.11, with the recent October consolidation around $102-$110 forming a secondary floor, while resistance is anchored at the 52-week high of $254.11, with the more immediately relevant overhead supply likely in the $145-$160 zone where the stock repeatedly failed in August and September. A decisive break below $101.11 would signal a fresh leg lower and validate the value-trap thesis, whereas reclaiming and holding above $145 would be the first evidence of a genuine trend change. With a beta of just 0.731, Charter is theoretically about 27% less volatile than the market, but the -63.86% drawdown and 10.6% single-day move demonstrate that idiosyncratic, stock-specific risk is dominating here, meaning position sizing should be governed by event and balance-sheet risk rather than market beta alone.
fundamental_analysis
Beta
0.73
0.73x market volatility
Max Drawdown
-63.0%
Largest decline past year
52-Week Range
$101-$254
Price range past year
Annual Return
-34.8%
Cumulative gain past year
| Period | CHTR Return | S&P 500 |
|---|---|---|
| 1m | +33.0% | -2.4% |
| 3m | -12.9% | -2.3% |
| 6m | -2.9% | +2.8% |
| 1y | -34.8% | +11.3% |
| ytd | -34.9% | +11.4% |
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CHTR Fundamental Analysis
The revenue trajectory is stable but uninspiring: Q3 2026 revenue of $14.92 billion grew 9.14% year-over-year versus $13.67 billion in Q3 2025, yet that headline growth masks a sequential decline from Q2's $13.53 billion and Q1's $13.60 billion, and the YoY figure is flattered by comparison against a soft prior-year base. The multi-quarter trend shows revenue oscillating in a narrow $13.5-$14.9 billion band (Q4 2025: $13.60 billion; Q1 2026: $13.60 billion; Q2 2026: $13.53 billion), consistent with a mature, subscriber-challenged business rather than a growth story. Segment data underscores the mix: residential internet at $6.40 billion and residential video at $3.29 billion remain the core, while commercial at $2.25 billion and advertising at just $0.46 billion are too small to offset broadband attrition, implying the investment case rests on defending the internet base and monetizing mobile rather than on top-line acceleration.
Profitability has deteriorated dramatically at the reported level: Q3 2026 swung to a net loss of -$2.40 billion and EPS of -$20.50, with gross profit of -$3.53 billion and a gross margin of -23.63%, a stark reversal from Q2 2026's $1.29 billion net income, $6.14 billion gross profit, and 45.42% gross margin. The Q3 distortion appears driven by a $4.43 billion other non-cash charge and a $2.62 billion depreciation and amortization load against $18.45 billion in cost of revenue, pushing operating income to -$3.53 billion; the trailing-company gross margin of 46.32% and operating margin of 24.36% are far more representative of the underlying business. Even on a normalized basis, margins are compressing modestly (Q1 2026 gross margin 46.15%, Q2 45.42%) as competition pressures pricing, and the 9.10% net margin reflects a capital-intensive, high-fixed-cost structure where small revenue shortfalls translate into outsized profit swings.
The balance sheet is the central risk: debt-to-equity stands at 6.05x, the current ratio is a thin 0.387, and cash of just $599 million against a multi-hundred-billion-dollar debt load leaves minimal liquidity cushion, while interest expense of $1.34 billion in Q3 alone consumes a large share of operating cash flow. Free cash flow remains the saving grace at $3.93 billion TTM, with Q3 operating cash flow of $4.03 billion against $3.03 billion of capex, and ROE of 31.06% (inflated by leverage and a shrinking equity base from buybacks) alongside ROA of just 4.91%. The company can fund operations internally but depends on capital markets to refinance debt and sustain buybacks, making it acutely rate-sensitive; the 1.33x capex coverage ratio and 0.038 cash-flow-to-debt ratio highlight how little margin for error exists if broadband losses accelerate.
Quarterly Revenue
$14.9B
2026-09
Revenue YoY Growth
+9.1%
YoY Comparison
Gross Margin
-23.6%
Latest Quarter
Free Cash Flow
$3.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CHTR Overvalued?
Because trailing net income is positive on a TTM basis (net margin 9.10%), the PE ratio is the appropriate primary metric, and it is extraordinarily low at 5.66x trailing versus a forward PE of just 3.27x. That gap implies the market expects earnings to grow substantially, or more likely, that the forward estimate embeds a normalization from the Q3 charge and reflects skepticism that current earnings power is durable; a 3.27x forward multiple is deep-distressed territory for a profitable, cash-generative business. The PEG ratio of 1.47 suggests the market is not paying up for growth, consistent with a stock priced for stagnation or decline rather than expansion.
Against its Communication Services / Telecommunications peers, Charter screens at a steep discount: a PS ratio of 0.52x, EV/Sales of 2.55x, EV/EBITDA of 5.89x, and P/B of 1.76x are all well below the multiples typically commanded by large-cap cable and telecom operators, where EV/EBITDA commonly runs in the 7-9x range. The discount is partly justified by the 6.05x debt-to-equity leverage, negative Q3 earnings, and structural broadband competition from fixed wireless and satellite, but a 5.89x EV/EBITDA multiple on a business with 24.36% operating margins and $3.93 billion of TTM free cash flow arguably over-discounts those risks. The 0.52x sales multiple versus a sector norm closer to 1.5-2.0x represents a roughly 65-75% discount, a spread that only makes sense if investors believe cash flows are in permanent structural decline.
Historically, Charter has traded at far richer multiples: its PS ratio was 3.52x in Q4 2024, 4.10x in Q2 2025, and 8.67x back in Q4 2021, while P/B has collapsed from 8.15x in Q4 2021 to 1.76x today and PE has compressed from the 10-13x range in 2023-2024 to 5.66x. The stock is now at or near the bottom of its own multi-year valuation band across every metric, which either signals a generational value opportunity or reflects genuine fundamental deterioration and a permanent re-rating lower for legacy cable. Given the -63.86% drawdown and the market's clear verdict on broadband competition, the burden of proof rests on management to demonstrate subscriber stabilization before the multiple can mean-revert.
PE
5.7x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 3x~19x
vs. Industry Avg
9.1x
Industry PE ~9.1x*
EV/EBITDA
5.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are dominated by the balance sheet: debt-to-equity of 6.05x, a current ratio of just 0.387, and $599 million of cash against a multi-hundred-billion-dollar debt load leave minimal cushion, while $1.34 billion of quarterly interest expense consumes a large share of operating cash flow. The 0.038 cash-flow-to-debt ratio and 1.33x capex coverage mean the company depends on capital markets to refinance and sustain buybacks, making it acutely rate-sensitive. Earnings volatility is extreme — Q3 2026 swung to a -$2.40 billion net loss and -$20.50 EPS on a $4.43 billion non-cash charge, versus $1.29 billion of net income in Q2 — and revenue is concentrated in residential internet ($6.40 billion) and video ($3.29 billion), both of which face subscriber pressure. With a 9.10% net margin and high fixed costs, small revenue shortfalls translate into outsized profit swings.
Market and competitive risks center on the secular threat from 5G fixed wireless access and Starlink, which is directly eroding the core broadband base and was crystallized by the roughly 27% single-month share price collapse in September 2026 tied to rising rates and competitive share loss. Valuation compression risk is real despite the low absolute multiple: the stock has already de-rated from 8.67x sales in Q4 2021 and 4.10x in Q2 2025 to 0.52x today, and the market may be pricing a permanent re-rating lower for legacy cable rather than a temporary discount. The pending Cox acquisition adds integration and regulatory risk, and the wide analyst target range of $68 to $380 (a 5.5x spread) signals deep disagreement about terminal value. Beta of 0.731 suggests about 27% less volatility than the market, but the -63.86% drawdown and 10.6% single-day move show idiosyncratic, stock-specific risk is dominating.
The worst-case scenario is a chain in which broadband losses accelerate, fixed wireless and satellite take further share, and refinancing costs rise, forcing management to cut buybacks and capex while margins compress — precisely the path the $68 analyst low target prices in. From the current $134.06, that bear target implies roughly -49%, and a retest of the 52-week low of $101.11 would mean about -25%. A decisive break below $101.11 would validate the value-trap thesis and open a fresh leg lower, with the -63.86% max drawdown showing how far the stock can fall when the narrative turns. Position sizing should be governed by event and balance-sheet risk rather than beta alone.
FAQ
Ranked by severity: first, balance-sheet and refinancing risk — debt-to-equity of 6.05x, a current ratio of just 0.387, only $599 million of cash, and $1.34 billion of quarterly interest expense make the company acutely dependent on capital markets, with a 0.038 cash-flow-to-debt ratio leaving little margin for error. Second, competitive/structural risk — 5G fixed wireless and Starlink are directly eroding the residential internet base ($6.40 billion of Q3 revenue), the threat that drove the roughly 27% September 2026 collapse and the -36.30% one-year decline. Third, earnings volatility and company-specific risk — Q3 2026 swung to a -$2.40 billion net loss and -$20.50 EPS on a $4.43 billion non-cash charge, and the pending Cox acquisition adds integration and regulatory uncertainty. Fourth, sentiment and valuation-compression risk — 10 Hold and 6 Sell ratings, Wolfe's September 2026 downgrade to Underperform, and a $68-$380 target spread signal genuine disagreement about terminal value, so further downgrades could pressure the shares even at today's depressed multiple.
The 12-month outlook splits into three scenarios: a 55% base case of $134.06-$170.44 (moderate broadband attrition, no repeat of the Q3 charge, FCF near $3.9 billion, multiple stuck at 5.5-6.5x EV/EBITDA), a 25% bear case of $68-$101.11 (accelerating subscriber losses, refinancing stress, Cox disruption, retest of the 52-week low), and a 20% bull case of $170.44-$254.11 (broadband net adds bottoming, Cox closing with credible synergies, re-rating toward 7-9x). The base case is most likely, and its key assumption is that residential internet losses persist but do not accelerate beyond recent trends while interest expense holds near $1.3 billion per quarter. The wide $68-$380 analyst range underscores that any single target is low-confidence, so the forecast should be read as a probability-weighted distribution rather than a point estimate.
On every metric Charter screens deeply undervalued relative to both peers and its own history. It trades at 5.66x trailing and 3.27x forward PE, 0.52x sales, 5.89x EV/EBITDA, and 1.76x book, versus a PS ratio of 4.10x as recently as Q2 2025 and 8.67x in Q4 2021, and a P/B of 8.15x in Q4 2021. The 0.52x sales multiple is roughly a 65-75% discount to the 1.5-2.0x typical of large-cap cable and telecom, and the 3.27x forward PE is distressed territory for a business with 24.36% operating margins. The market is effectively pricing in permanent structural decline in broadband cash flows, so the valuation implies investors expect subscriber losses to continue and the multiple to stay compressed; if that assumption proves too pessimistic, the re-rating potential is large, but the discount is a judgment on durability rather than a free lunch.
The risk/reward is balanced rather than compelling, which is why the synthesized view is Hold rather than Buy. On the positive side, the $170.44 average analyst target implies about +27.1% upside from $134.06, and the stock trades at just 5.89x EV/EBITDA and 0.52x sales against a cable/telecom norm of roughly 7-9x and 1.5-2.0x. Against that, the biggest downside risk is a retest of the $101.11 52-week low (about -25%) or the $68 analyst low target (about -49%) if broadband losses accelerate, and the Street's 10 Hold / 6 Sell split with a 3.0 recommendation mean shows most analysts see no urgency. It is a reasonable buy only for deep-value investors with a multi-year horizon who can stomach 6.05x debt-to-equity leverage and wait for subscriber stabilization; for most others, waiting for two quarters of flat-to-positive internet net adds would materially improve the odds.
Charter is better suited to a long-term holding period of at least 18-24 months than to short-term trading. It is a mature, capital-intensive business with no dividend (0% payout ratio) and earnings visibility clouded by subscriber trends, so returns depend on multiple mean-reversion and FCF durability rather than on growth or income. The 0.731 beta suggests below-market volatility, but the -63.86% max drawdown and +10.61% single-session move on 4.37 million shares show idiosyncratic risk dominates, and the 5.47-day short ratio means short-term price action is heavily driven by positioning and the recent +29.68% one-month snapback. A concrete minimum holding period of two years gives the Cox integration and broadband stabilization thesis time to play out; short-term traders would be trading a broken downtrend with binary event risk around earnings and refinancing.