Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Strong Return on Equity
Healthy Gross Profit Margin
High Free Cash Flow Per Share
Strong Customer Retention
Growth in Mobile Business
Investment in Network and Customer Experience
Potential for Revenue Growth
Expansion of Rural Services
Innovative Customer Engagement
High EV/EBITDA Ratio
Low Net Profit Margin
High Debt Levels
Weak Liquidity Ratios
Impact of Natural Disasters
Subscriber Losses
Competition in the Market
CapEx Pressures
Charter Communications exhibits a robust business model with strong customer retention and significant growth in its mobile segment. However, it faces challenges from natural disasters affecting customer counts and ongoing competition. Future prospects look promising with plans for EBITDA growth and rural expansion, but concerns regarding CapEx and market competition could impact performance.
Analysis Date: January 31, 2025
Last Updated: March 11, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$1377.02
Current Market Price: $337.89
IV/P Ratio: 4.08x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
75.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CHTR
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (9.46)
P/B ratio ≤ 1.5 (2.44)
Current ratio ≥ 2.0 (0.31x)
Long-term debt < Net current assets (-9.96x)
Margin of safety (75.0%)
CHTR does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
CHTR has a return on equity of 34.72%, indicating efficient use of equity in generating profits.
With a gross profit margin of 55.00%, CHTR effectively retains a significant portion of revenue after accounting for the cost of goods sold.
The net profit margin of 9.23% indicates that a relatively small portion of revenue is converted into profit after all expenses.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
34.72%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.98%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
55.00%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
9.23%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
CHTR generates a robust free cash flow per share of $22.24, indicating strong cash generation capabilities.
The debt-to-equity ratio of 4.77 suggests high leverage, which may pose risks in economic downturns.
Current and quick ratios both below 0.32 indicate potential liquidity issues, making it difficult to cover short-term liabilities.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
3.94x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.31x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Charter successfully retained roughly 90% of former Affordable Connectivity Program (ACP) customers, showcasing strong customer loyalty and effective retention strategies.
The Spectrum Mobile business added over 2 million lines in 2024, making Charter the fastest growing mobile provider in the U.S. This growth indicates a strong competitive position in mobile connectivity.
Charter's ongoing multiyear investment initiatives in network evolution, expansion, and employee training are delivering tangible results, improving service quality and operational efficiency.
Natural disasters like Hurricane Helene and Hurricane Milton resulted in over 20,000 customer disconnects and a $35 million reduction in adjusted EBITDA due to credits provided to affected customers.
Charter lost 177,000 Internet customers in Q4 2024, which could indicate challenges in maintaining market share amidst increased competition.
The company is expected to grow adjusted EBITDA in 2025, driven by mobile growth and improved pricing and packaging strategies, indicating a solid outlook for financial performance.
Charter's rural subsidized initiative saw significant growth, with expectations for continued rural passings growth of approximately 450,000 in 2025, enhancing overall market reach.
The introduction of seamless entertainment packages and the brand refresh under Life Unlimited is expected to drive customer acquisition and retention, as well as enhance value for existing customers.
The competitive landscape remains challenging with increasing competition from fiber and cellphone Internet, which may limit growth potential if not effectively managed.
While capital expenditures are expected to peak in 2025, they may limit short-term free cash flow growth, posing challenges for financial flexibility.