Charter Communications, Inc. (CHTR): what the price assumes
boothcheck covers Charter Communications, Inc. (CHTR) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-25.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/CHTR
Headline
| Field | Value |
|---|---|
| Ticker | CHTR |
| Company | Charter Communications, Inc. |
| Sector / Industry | Communication Services |
| Current price | $153.62/sh |
| Composition | Internet 43% / Mobile service 7% / Video 25% / Voice 2% / Small business 8% / Mid-market & large business 5% / Advertising sales 3% / Other 6% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 14.4% |
| Operating margin today | 23.3% |
| Margin compression (value-band) | -8.9pp |
| Multiple paid | 9x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 2.2% sits below it).
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -1.27σ |
| cohort percentile (of 34 peers) | 18 |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple value, while growth-DCF lands below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.36x | 5 | justifies |
| Earnings | 0.25x | 3 | justifies |
| Relative | 0.42x | 4 | justifies |
| Growth | 1.64x | 3 | expensive |
Families that justify the price: Asset, Earnings, Relative Families that call it expensive: Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 4.7%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $15.08 | 10.19x | yes | FCF base $4.4B, growth -1% (input: historical growth), terminal g 0.5%, WACC 4.7%, 5yr projection |
| DCF Exit Multiple | Growth | $180.56 | 0.85x | yes | Exit EV/EBITDA: 7.0x / 9.0x / 11.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $290.22 | 0.53x | yes | P/E 7.55x (blended: static sector reference 10x + trailing (TTM) 4x), scenarios: 6.4x / 7.5x / 8.7x (bear / base = reference held flat / bull), EV/EBITDA 7x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $429.40 | 0.36x | yes | BV/sh $136.74, ROE (TTM) 29.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $780.83 | 0.20x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $93.40 | 1.64x | yes | Rev $54.4B, growth -1% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.4x / 0.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $461.28 | 0.33x | yes | EPS $38.44, growth 5% (input: historical EPS growth), PEG=0.73 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $874.23 | 0.18x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $12.56B × (1−24%) / WACC 4.7% → EPV (no growth) |
| Residual Income | Asset | $651.46 | 0.24x | yes | BV $136.74 + 5yr PV of (ROE (TTM) 29.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $343.90 | 0.45x | yes | √(22.5 × EPS $38.44 × BVPS $136.74) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 15362.00x | yes | EBITDA $12.66B × sector EV/EBITDA 7.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 15362.00x | yes | FCF $4358.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 15362.00x | yes | SBC-adj FCF $3.72B (FCF $4.36B − SBC $0.64B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $614.85 | 0.25x | yes | EPS $38.44 × (8.5 + 2×5.3%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $60.72 | 2.53x | yes | BV $136.74 × (ROIC 2.1% / WACC 4.7%) |
| P/Sales Sector | Relative | $526.54 | 0.29x | yes | Revenue $54.40B × sector P/S 1.2x |
| PEG Fair Value | Relative | $305.16 | 0.50x | yes | EPS $38.44 × (PEG 1.5 × growth 5.3% (input: historical EPS growth)) → PE 7.9x |
| Earnings Yield | Earnings | $415.57 | 0.37x | yes | EPS $38.44 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Broadband connectivity (single reportable segment) | operating | enterprise | 54.8B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $93.5b |
| Net debt / NOPAT (after-tax) | 9.68x |
| Net debt / operating income (pre-tax) | 7.38x |
| Share count CAGR (buyback) | -7.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- The equity here is what is left over once the lenders are paid, and net borrowings run about 7.3 times operating profit, so a modest move in operating profit becomes a large move in the share price in either direction.
- Connectivity is holding up better than the headline decline suggests, with the 10-K reporting that "During the year ended December 31, 2025, we added 1.9 million mobile lines" over a year in which internet and video customer counts both fell.
- Watch the share count, which has been shrinking at about 7.7% a year, because at this level of borrowing repurchases are the mechanism turning flat operating profit into rising value per remaining share, and they are also the reason the principal is not coming down.
Bull Case
Run a value screen and Charter looks like a data error. Book value of $129.17 a share and trailing earnings of $36.96 a share describe a company the screen cannot make sense of. That combination usually means the market has stopped believing the accounts, or that the company is close to not existing. Neither is what is happening here. What a per-share screen cannot show is the shape of the capital structure sitting underneath those figures. This equity is what is left over once the lenders are paid, and the lenders are owed roughly 94.4 billion dollars against a network that is already built. The borrowing does not make the business better. It makes the equity a geared claim on it, and gearing runs in both directions.
The business under the gearing is a strong one on the operating line. Charter turns about 23.5% of revenue into operating profit, roughly half again the margin CMCSA earns on its far larger base, where the operating line runs about 15.3%. The difference is mix rather than skill. Comcast carries studios, parks and cable networks alongside its plant, while Charter sells connectivity and the products that attach to connectivity. Internet alone is 43% of revenue. Selling bandwidth across a network whose construction cost is already spent remains one of the higher-margin activities available in American infrastructure.
Growth, such as it is, comes from mobile, and it runs over somebody else's radio network. The 10-K reports that "During the year ended December 31, 2025, we added 1.9 million mobile lines", and it counts them conservatively: "Mobile lines exclude wearables and other devices that do not require standard phone rate plans." Mobile is only 7% of revenue, so the dollars are small. The value is in what a second product does to churn. A household buying internet and phone on one bill is harder to move than a household buying internet alone, and the same disclosure shows those additions arriving in a year when internet and video counts declined. Video itself is being repositioned rather than defended, with the company noting that "We also continue to evolve other elements of our video product and are deploying Xumo stream boxes to new video customers."
Capital allocation is where the borrowing earns its keep. The share count has fallen about 7.7% a year over four years, and the 10-K states the policy without dressing it up: "Although Charter expects to continue to buy back its common stock consistent with its leverage target range, Charter is not obligated to acquire any particular amount of common stock". Put the two facts together and the arithmetic is unusual. If operating profit merely holds flat while the company keeps retiring that proportion of the shares, profit per remaining share climbs at close to the retirement rate. Very few mature businesses have that mechanism running at that speed.
The bear is right that video is shrinking and that the debt is real, and the bull case does not need to argue either point. It needs a narrower one. Three of the four families of valuation method used here already place value above today's price, on asset value, on earnings power and on peer multiples. Only the forward-growth methods land below, which is what happens when a model extends a declining customer count forward. The bull case is not that growth returns. It is that a business earning this margin, retiring this much stock, does not require growth in order to compound value for the holders who stay.
Bear Case
Consider what management is choosing to do with the cash. Charter is retiring stock at about 7.7% a year while carrying roughly 93.9 billion dollars of net borrowings, a sum equal to 7.3 times operating profit, or 9.8 times after-tax operating profit. The policy is explicitly discretionary and explicitly pegged to leverage: "Although Charter expects to continue to buy back its common stock consistent with its leverage target range, Charter is not obligated to acquire any particular amount of common stock, and the timing of any purchases that may occur cannot be predicted". That is worth reading as an incentive question rather than a disclosure formality. Repurchasing shares instead of retiring principal holds leverage steady, which serves equity holders well while operating profit is stable and serves nobody if it stops being stable.
Borrowing at that scale is not a decision taken once. It is a permanent refinancing programme, and part of the stack floats. The 10-K notes that "SOFR was 3.7 % and 4.3 % as of December 31, 2025 and 2024, respectively." and describes term loans priced at spreads above that benchmark with maturities reaching into 2030. A company owing this much does not get to pick the interest-rate environment its maturities land in. It gets to pick only how much of its free cash flow has already been committed elsewhere by then.
The operating pressure is what makes the borrowing matter. The risk section is unusually direct, warning of "an increase in the number of Internet and voice customers substituting mobile data and voice products for wireline services, which would negatively impact our ability to attract customers, increase rates and maintain or increase revenue", and noting that "Competition is also posed by fixed wireless and satellite master antenna television systems serving MDUs, such as condominiums, apartment complexes, and private residential communities." Fixed wireless is the specific threat, because a mobile carrier can sell home broadband over spectrum it already owns without recovering the cost of trenching a street. Video is further along the same path: the filing states that "Our residential video service faces growing competition across our footprint from a number of other sources", and video is a quarter of revenue.
This is the point where the price argues for the bear rather than against it. At $123.33 the market pays about 8.6 dollars for each dollar of annual operating profit. Put it another way: a business shrinking 5% a year would still merit a higher multiple than this one carries. So the market is not arguing about how fast this business grows. It is arguing about whether what remains for shareholders after the lenders are satisfied is worth what the accounts say it is. The asset-value and earnings-power methods land far above the price partly because they read a return on equity near 30.1%, and a 30% return on a book value that borrowing and repurchases have already compressed is not the same animal as a 30% return on capital. The market appears to have noticed.
What bounds the downside is thinner than the book value implies. Outside the operating business the company holds about 503 million dollars of equity stakes, real money but small against an equity of this size. The actual floor is cash generation, which runs near 4.0 billion dollars a year. While that holds, the debt is serviceable and the equity has time to work. If broadband unit losses reach the operating line in earnest, the same gearing that turns flat profit into rising per-share profit runs in reverse, and it does so faster than the underlying business ever moves.
Valuation
The multiple has to be dealt with first, because at this level it is most of the conversation. At $123.33 the market pays about 8.6 dollars for every dollar of annual operating profit. That is not simply inexpensive against the sector. A business shrinking 5% a year would still merit a higher multiple than this one carries. The useful consequence is that nothing has to go right for the arithmetic to work. Something merely has to not go badly wrong.
The valuation methods point in a lopsided direction here. Asset value, earnings power and peer multiples all land above today's price. Only the forward-growth methods land below it, with the price sitting about 61% above their central estimate, and they arrive there by extending a shrinking customer count forward into a shrinking cash flow. That is the map. Three lenses say the equity is worth more than it fetches, and the fourth says the trend line is the problem.
Those three lenses share a blind spot worth naming out loud. Book value of $129.17 a share and trailing earnings of $36.96 a share both describe what is left after the lenders, and what is left is small next to what stands in front of it. The same structure produces a return on equity near 30.1%, which flatters the business by measuring profit against a book value that borrowing and repurchases have compressed. Read the whole enterprise rather than the share and the picture turns ordinary: about 8.6 dollars of enterprise value for each dollar of operating profit, on revenue that is barely moving.
Against its cohort the multiple sits in the lower half of the peer range. CMCSA, the nearest comparable at scale, earns an operating margin near 15.3% on revenue of roughly 125.3 billion dollars, while Charter earns about 23.5% on a much smaller base, because its revenue is almost purely connectivity. Internet is 43% of it and video another 25%, while the lines that are actually growing remain small: the 10-K reports that "During the year ended December 31, 2025, we added 1.9 million mobile lines", which is the one row in the customer table moving the right way.
Solvency closes the description, and it is arithmetic rather than judgment. Net borrowings of roughly 93.9 billion dollars stand at 7.3 times operating profit, and the company is not consuming cash. It has been retiring stock at about 7.7% a year for four years, which is direct evidence of where the free cash flow goes, and where it does not: the company says it will "continue to evaluate the deployment of our cash on hand and anticipated future free cash flow, including investing in our business growth and other strategic opportunities, including expanding the capacity of our network", with principal reduction conspicuously not the priority. The equity therefore compounds when operating profit holds and compresses when it slips, at a speed the operating business itself never experiences. That gearing, rather than the multiple, is what is actually being bought at this price.
Catalysts
The Q1 2026 report on April 24 was the most recent catalyst: operating cash flow of $4.3 billion, capital spending of $2.9 billion against a full-year plan near $11.4 billion, and broadband subscriber losses that came in less severe than feared. Guidance assumes slight EBITDA growth excluding transition costs, helped by a political-advertising tailwind in 2026. The next quarterly print is the test of whether broadband losses keep moderating.
The forward watch items are clear and weighty. First, broadband net additions, the single most important operational metric, since the core profit engine is under pressure from fixed wireless and satellite competition. Second, the Cox acquisition, the major long-term catalyst, where the targets are at least $800 million of run-rate operating-expense synergies and a path to low-3x leverage within three years of close; integration progress and transition costs are the things to track. Third, mobile line growth, the bundle's growth lever that can offset broadband softness. Fourth, the buyback pace, since at a low-single-digit multiple the repurchase is the most powerful per-share driver, and its cadence against the roughly $94 billion debt load signals how management balances returns against deleveraging.
Peer Cohorts (Per Segment, With Filing Citations)
Broadband connectivity (single reportable segment) (reported)
- CMCSA (Comcast Corporation)
- FY2025 10-K: …the same scale. (b) Segment details in the charts exclude the results of Content & Experiences Headquarters and Other and Eliminations and therefore the amounts do not equal the total. Residential Connectivity & Platforms Media • Revenue decreased due to decreases in video, other and advertising revenue, partially…
- FY2025 10-K: …"Non-GAAP Financial Measures" section on page 46 for additional information, including our definition and our use of constant currency, and for a reconciliation of constant currency amounts. Residential Connectivity & Platforms Segment - Revenue Domestic broadband revenue primarily consists of revenue from sales of…
- LILA (Liberty Latin America Ltd.)
- FY2025 10-K: …unable to estimate a possible loss or range of possible loss associated with this claim. (17) Segment Reporting Our reportable segments derive their revenue primarily from residential and B2B services, including video, broadband internet, fixed-line telephony and mobile services. Our corporate category includes our…
- FY2025 10-K: …focused on leveraging our full-service product suite to deliver fixed-mobile convergence offerings. Our business products and services also include enterprise-grade connectivity, data center, hosting and managed solutions, as well as IT solutions with customers ranging from small and medium enterprises to…
- LBTYA (Liberty Global Ltd.)
- FY2025 10-K: …measures. In addition, we offer " Smart Home " bundles in select markets, providing those customers with enhanced entertainment and home automation and security services. Finally, our " Connect App " allows customers to access and manage all of our services. We are also looking to launch our "Markets One App," where…
- FY2025 10-K: …statistics are presented on a consistent and accurate basis at any given balance sheet date, the variability from country to country in (1) the nature and pricing of products and services, (2) the distribution platform, (3) billing systems, (4) our bad debt collection efforts and (5) other factors add complexity to…
- WBD (Warner Bros. Discovery, Inc.)
- FY2025 10-K: …and the Global Linear Networks reportable segment, as well as other Corporate eliminations. 55 Supplemental Data for Results of Operations (in millions) Supplemental Consolidating Data Consolidated Streaming & Studios Global Linear Networks Corporate Consolidating adjustments For the year ended December 31, 2025 2024…
- FY2025 10-K: …as of June 3, 2010, among Discovery Communications LLC, Discovery Communications, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Form 8-K filed on June 3, 2010 (SEC File No. 001-34177)) 4.5 Fourth Supplemental Indenture, dated as of May 17, 2012, among Discovery…
- ROKU (Roku, Inc.)
- FY2025 10-K: …expense (refer to Note 12) charged to Cost of revenue, platform. The Company disclosed charges related to the inventory provision and inventory losses on purchase commitments (refer to Note 2) and stock-based compensation expense (refer to Note 12) included within Cost of revenue, devices. The Company reports its…
- FY2025 10-K: , requires a paid subscription, and can be ad-supported or ad-free. TV streaming : The act of streaming content over the internet on a TV. The Roku Channel: A Roku owned and operated streaming service. The Roku Channel aggregates three types of content-AVOD, FAST, and Premium Subscriptions-within The Roku Channel app…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.