Charter Communications, Inc. (CHTR): what the price requires
The current priced-in claim for Charter Communications, Inc. (CHTR) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CHTR
Headline
| Field | Value |
|---|---|
| Ticker | CHTR |
| Company | Charter Communications, Inc. |
| Current price | $132.19/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 14.5% |
| Operating margin today | 23.5% |
| Margin compression implied | -9.0pp |
| Multiple paid | 9x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration 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 2.1% sits below it).
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.27σ |
| cohort percentile (of 32 peers) | 13 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. 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 | 0.31x | 5 | justifies |
| Earnings | 0.28x | 3 | justifies |
| Relative | 0.39x | 4 | justifies |
| Growth | 1.23x | 2 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 4.6%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $4.14 | 31.93x | yes | FCF base $4.0B, growth -1% (input: historical growth), terminal g 0.5%, WACC 4.6%, 5yr projection (excluded from median) |
| DCF Exit Multiple | Growth | $156.30 | 0.85x | yes | Exit EV/EBITDA: 6.6x / 8.6x / 10.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $272.03 | 0.49x | yes | P/E 7.36x (blended: static sector reference 10x + trailing (TTM) 3x), scenarios: 6.2x / 7.4x / 8.5x (bear / base = reference held flat / bull), EV/EBITDA 7x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $420.42 | 0.31x | yes | BV/sh $129.17, ROE (TTM) 30.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $783.28 | 0.17x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $82.11 | 1.61x | yes | Rev $54.6B, growth -1% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.3x / 0.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $443.52 | 0.30x | yes | EPS $36.96, growth 3% (input: historical EPS growth), PEG=1.03 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $865.68 | 0.15x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $12.46B × (1−25%) / WACC 4.6% → EPV (no growth) |
| Residual Income | Asset | $641.41 | 0.21x | yes | BV $129.17 + 5yr PV of (ROE (TTM) 30.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $327.75 | 0.40x | yes | √(22.5 × EPS $36.96 × BVPS $129.17) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 13219.00x | yes | EBITDA $12.88B × sector EV/EBITDA 7.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 13219.00x | yes | FCF $4030.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 13219.00x | yes | SBC-adj FCF $3.38B (FCF $4.03B − SBC $0.65B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $467.35 | 0.28x | yes | EPS $36.96 × (8.5 + 2×3.3%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $61.43 | 2.15x | yes | BV $129.17 × (ROIC 2.2% / WACC 4.6%) |
| P/Sales Sector | Relative | $516.86 | 0.26x | yes | Revenue $54.64B × sector P/S 1.2x |
| PEG Fair Value | Relative | $184.80 | 0.72x | yes | EPS $36.96 × (PEG 1.5 × growth 3.3% (input: historical EPS growth)) → PE 4.9x |
| Earnings Yield | Earnings | $399.57 | 0.33x | yes | EPS $36.96 / 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 | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $93.9b |
| Net debt / NOPAT (after-tax) | 9.80x |
| Net debt / operating income (pre-tax) | 7.30x |
| 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 catch is leverage. Net debt is roughly $94 billion, about 7.3 times operating income, at a blended interest rate near 5.1%. The equity is a thin slice on top of an enormous debt stack, which is why cash-flow methods that net out the debt collapse toward zero.
- The story is a deeply discounted, highly levered cable operator using its $4 billion-plus annual free cash flow to retire stock, shrinking shares nearly 8% a year, while it fights broadband subscriber losses and integrates the pending Cox acquisition.
Bull Case
Charter is the rare name where the price sits below almost every method rather than above it, and that is the entry point worth examining. Trailing EPS is about $36.96, which puts the stock at a low-single-digit price-to-earnings multiple, and the reverse-DCF reads the price as below its floor, meaning the market is pricing in decline that the current earnings do not yet show. For a business still generating over $4 billion of annual free cash flow, that is a discount, not a fair price.
The cash engine is what makes the discount actionable. Charter is using that free cash flow to retire its own stock aggressively, shrinking the share count nearly 8% a year. When a levered equity trades at a few times earnings and management buys back stock at that multiple, every dollar repurchased lifts per-share value sharply. Operating cash flow was $4.3 billion in Q1 2026, and even after heavy capital spending the company keeps returning capital. A 23.6% operating margin and trailing return on equity around 30% show the underlying network is highly profitable; the equity is cheap because of the debt above it, not because the business is unprofitable.
The forward lever is the Cox acquisition. Management frames it as applying Charter's pricing and packaging to a footprint with low mobile and video penetration, targeting at least $800 million of run-rate operating-expense synergies with room for more from procurement and B2B scale. Mobile is the growth engine inside the bundle, adding lines while broadband stabilizes, and the company guides to post-acquisition leverage drifting toward the low end of a 3.5x to 3.75x range within three years while maintaining significant capital returns. A buyer at $126.19 is paying a deep discount for a cash-generative network, a large buyback, and an integration that could lift margins and deleverage at the same time.
Bear Case
The disconnect is real, and the qualitative truth behind it is that broadband, Charter's core profit engine, is under structural attack. The company is losing internet subscribers, and the competition is no longer just other cable operators. The filing names the threats directly: fixed wireless access, satellite, and DBS providers competing across its footprint (FY2025 10-K, accession 0001091667-26-000017). Fixed wireless from the mobile carriers and emerging satellite broadband are taking share at the low end, and once a customer leaves a cable network the reacquisition cost is high. A stock can look cheap on trailing earnings and still be a value trap if the earnings base is eroding, and broadband-subscriber losses are exactly the kind of erosion that makes a low multiple deserved rather than opportune.
The leverage turns that erosion into a high-stakes bet. As of year-end 2025 the accreted value of total debt was approximately $94.8 billion at a blended weighted-average interest rate near 5.1% (FY2025 10-K, accession 0001091667-26-000017). Net debt runs about 7.3 times operating income, and the cash-flow valuation methods that net the debt against the enterprise collapse to roughly zero, which is the model's way of saying the equity is a thin, highly geared residual. If EBITDA declines even modestly while the debt stays fixed, the equity absorbs a disproportionate share of the loss, and refinancing $94 billion of debt is a recurring exposure to interest rates the company does not control.
The Cox acquisition, the bull's catalyst, is also a risk amplifier. It is a large, complex integration that adds scale and synergy targets but also execution risk and near-term transition expense, $24 million in Q1 alone, on top of an already heavy capital-spending plan of roughly $11.4 billion for 2026. The valuation methods that ignore the debt, like earnings power value at $877.15 and residual income at $641.41, are not relevant to the equity holder; they describe the enterprise, not the levered slice the market actually owns. The honest bear read is that Charter is cheap because broadband is shrinking, the balance sheet is geared 7x, and the path back depends on a difficult integration working in a market where the company's core product is losing customers.
Valuation
Charter's valuation X-ray is dominated by one fact: roughly $94 billion of net debt sits between the enterprise and the equity, and that distorts every method differently. The equity-level frames that work off earnings per share and book value land well above the $126.19 price: relative valuation at $269.81, the Graham number at $327.75, residual income at $641.41, and earnings power value at $877.15. The enterprise-level frames that net the debt out collapse toward zero, with EV/EBITDA relative and the FCF-yield methods reading $0.01 because the debt consumes the enterprise value. The reverse-DCF reads the price as below its floor, with a blended multiple of about 8.6x.
The reason the methods diverge so violently is leverage, not disagreement about the business. A 23.6% operating margin and a $4 billion-plus free-cash-flow stream are real, but at 7.3x net-debt-to-operating-income the equity is a small, geared claim on that stream. The methods that look absurdly high ignore the debt; the methods that look absurdly low are choking on it. The reliable read sits in the middle, on equity-level multiples: trailing EPS near $36.96 at a $126.19 price is a low-single-digit P/E, cheaper than the cable peer group and far below the sector.
The honest synthesis is that Charter is statistically cheap with a real reason to be cheap. The deep discount on earnings reflects broadband subscriber losses, a 7x balance sheet, and the uncertainty around the Cox integration. The price sitting below its floor and below most equity methods says the market is pricing in continued decline; the bet a buyer makes is that free cash flow and the aggressive buyback, shrinking shares nearly 8% a year, plus Cox synergies and mobile growth, stabilize the business before the leverage forces the issue. If broadband stabilizes, the gap to the equity-method values is large. If it keeps eroding, the low multiple is the market correctly pricing a levered business in decline.
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)
- (no filing in the citation store)
- LILA (Liberty Latin America Ltd.)
- (no filing in the citation store)
- LBTYA (Liberty Global Ltd.)
- (no filing in the citation store)
- WBD (Warner Bros. Discovery, Inc.)
- (no filing in the citation store)
- ROKU (Roku, Inc.)
- (no filing in the citation store)
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.
- 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.