Finance Halo
CHTR Deep Value: Charter Communications Undervalued at Multi-Year Lows?
Price Action Analysis
Daily Chart (3-month): The daily chart shows a strong downtrend from early October, with prices falling from a high of over $280 to a low near $200 in late November. There have been several attempts at a recovery, but these have been met with selling pressure. Volume has been variable, with some spikes accompanying sharp price movements, suggesting that these moves were significant. The price is currently consolidating around the $210-$220 level.
Weekly Chart (2-year): The weekly chart reveals a longer-term uptrend that began in early 2023, reaching a peak above $400 in July 2024. Since then, the stock has experienced a significant decline, now trading at multi-year lows. The current price action suggests a potential bottoming formation, but a clear reversal pattern has not yet emerged. Volume on the weekly chart has been high during periods of significant price movement, both up and down.
News & Catalysts
- "Charter Communications (CHTR) Receives Analyst Upgrade from Goldman Sachs" (Source: StreetInsider.com, Date: December 10, 2025): This upgrade suggests a positive outlook from a reputable institution, which could influence investor sentiment and potentially lead to increased buying interest. The upgrade may be based on reassessment of the company's valuation or future growth prospects.
- "Charter Communications Faces Scrutiny Over Broadband Pricing Practices" (Source: Reuters, Date: December 5, 2025): Negative news regarding pricing practices could create headwinds for the company, potentially impacting future revenue and customer acquisition. This could lead to increased selling pressure or a cautious approach from investors until the situation is clarified.
- "CHTR Earnings Preview: What to Expect from Charter Communications" (Source: Zacks Equity Research, Date: December 8, 2025): Ahead of earnings, analyst expectations and previews can shape investor expectations. Positive previews might encourage buying, while cautious ones could lead to increased hedging or short positions.
Fondamental analysis
Valuation and Profitability Metrics
| Metric | Value |
|---|---|
| P/E Ratio | 15.60 |
| EV/EBITDA | 8.10 |
| P/B Ratio | 1.60 |
| Profit Margins | |
| Gross Margin | 65.20% |
| Operating Margin | 40.50% |
| Net Margin | 10.30% |
Financial Health
| Metric | Value |
|---|---|
| Debt-to-Equity | 2.10 |
| Current Ratio | 0.80 |
| Free Cash Flow | $3.50 Billion |
| Revenue Growth (YoY) | -1.50% |
| Net Income Growth (YoY) | -5.20% |
Analyst Estimates and Price Targets
| Metric | Consensus |
|---|---|
| Earnings Per Share (EPS) Estimate (Next Quarter) | $7.50 |
| Revenue Estimate (Next Quarter) | $13.80 Billion |
| EPS Growth (Next Year) | 5.00% |
| Revenue Growth (Next Year) | 2.00% |
| Analyst Price Target | |
| High | $350.00 |
| Median | $280.00 |
| Low | $220.00 |
Key Takeaways: Charter Communications appears to be trading at relatively attractive valuation multiples (P/E, EV/EBITDA) compared to historical averages and potentially industry peers, suggesting it might be undervalued. However, the company is experiencing slight revenue and net income declines year-over-year. Its debt-to-equity ratio is on the higher side, indicating significant leverage. Free cash flow remains robust. Analyst sentiment is mixed, with a wide dispersion in price targets, but the median target suggests significant upside potential from current levels.
Market & Sentiment Context
Market Context: The telecommunications and media sector, where Charter operates, is undergoing significant transformation due to increasing competition from streaming services, evolving consumer habits, and the build-out of new technologies like 5G and fiber optics. Macroeconomic factors such as inflation and interest rate changes can also impact consumer spending on discretionary services and the cost of capital for infrastructure investments.
Investor Sentiment: The recent price action, characterized by a sharp decline followed by stabilization, suggests a shift in sentiment. The substantial drop might indicate a deleveraging phase or investor concerns about competition and debt. However, the stabilization and recent positive analyst coverage could point to a potential bottoming process. Increased volume during the decline might signal distribution, while current lower volumes during consolidation could indicate a pause in selling or cautious accumulation.
Investment Outlook
From a deep-value perspective, Charter Communications presents a mixed but potentially compelling case. The current valuation multiples suggest the stock may be undervalued, especially considering its robust free cash flow generation and established market position. However, the declining revenue and net income, coupled with high debt levels, warrant caution. The company's ability to navigate competitive pressures and manage its debt effectively will be crucial for future performance. A margin of safety can be achieved by entering positions at lower price levels that account for the existing risks.
Key Buy/Sell Levels
Current Price: $212.06
Support Levels:
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$200 - $205: This zone represents the recent lows observed in late November. It has been tested and showed a bounce, indicating potential buying interest at these levels. The distance from the current price is $12.06 to $17.06, or 5.69% to 8.04%.
- I see support forming around the $200-$205 area, marked by recent lows. This level has shown resilience, and a bounce was observed after it was tested.
-
$180 - $190: This is a more significant support level, representing lows from earlier in the year (March 2024 on the weekly chart). A break below this could signal further downside. The distance from the current price is $22.06 to $32.06, or 10.40% to 15.12%.
- A more significant support zone is identified between $180 and $190, coinciding with lows from earlier in the year. This level is critical for the stock's longer-term trend.
Resistance Levels:
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$225 - $235: This area has acted as a resistance level during the recent downtrend and consolidation. It represents the upper bounds of the current trading range. The distance from the current price is $12.94 to $22.94, or 6.10% to 10.82%.
- Initial resistance is expected around the $225-$235 range, which has capped recent upward movements.
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$260 - $270: This zone was a significant support level before the sharp decline in October. It is now likely to act as a strong resistance area. The distance from the current price is $47.94 to $57.94, or 22.61% to 27.32%.
- A more formidable resistance is anticipated between $260 and $270, which previously served as a support zone before breaking down.
Buy Zones:
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Buy Zone 1: $200 - $205
- This zone has already been touched and showed a reaction. It represents a good entry point for value investors looking for a bounce, with a tight stop-loss below it.
- I see support forming around the $200-$205 area, marked by recent lows. This level has shown resilience, and a bounce was observed after it was tested.
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Buy Zone 2: $180 - $190
- This zone has not been touched since the price has been trading above it. It offers a greater margin of safety for a deep-value entry. The distance from the current price is $22.06 to $32.06, or 10.40% to 15.12%.
- A more significant support zone is identified between $180 and $190, coinciding with lows from earlier in the year. This level is critical for the stock's longer-term trend.
Summary & Takeaways
Charter Communications (CHTR) is currently trading at a significant discount to its historical and potential intrinsic value, presenting an opportunity for deep-value investors. The stock has experienced a substantial decline from its peak, but recent price action suggests a stabilization and potential for a turnaround. Key supporting factors include attractive valuation multiples, robust free cash flow, and positive analyst sentiment reflected in upgrade news.
However, risks remain, including high debt levels, declining revenue and net income, and competitive pressures in the telecommunications sector. A successful investment hinges on the company's ability to manage its debt, adapt to market changes, and return to profitable growth.
For investors, disciplined entry at identified support levels ($200-$205 and $180-$190) with appropriate risk management strategies would be prudent. Monitoring upcoming earnings reports and news related to regulatory scrutiny will be crucial for assessing future performance and potential catalysts.