Charter Communications Inc (CHTR, Financial) in the Spotlight
Charter Communications Inc (CHTR) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $422.32, Charter Communications Inc has witnessed a decline of 3.61% over a period, marked against a three-month change of 28.75%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Charter Communications Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Charter Communications Inc (CHTR, Financial) has been assigned the following ranks:
- 1. Financial strength rank: 3/10
- 2. Profitability rank: 9/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 8/10
- 5. Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and an impressive growth rank, GuruFocus assigned Charter Communications Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Charter Communications Inc Business
Charter Communications Inc, with a market cap of $63.21 billion and sales of $54.54 billion, is the product of the 2016 merger of three cable companies: Legacy Charter, Time Warner Cable, and Bright House Networks. The firm now holds networks capable of providing television, internet access, and phone services to roughly 56 million U.S. homes and businesses, around 40% of the country. Across this footprint, Charter serves 30 million residential and 2 million commercial customer accounts under the Spectrum brand, making it the second-largest U.S. cable company behind Comcast. The firm also owns, in whole or in part, sports and news networks, including Spectrum SportsNet (long-term local rights to Los Angeles Lakers games), SportsNet LA (Los Angeles Dodgers), SportsNet New York (New York Mets), and Spectrum News NY1.
Profitability Rank Breakdown
The Profitability Rank shows Charter Communications Inc's impressive standing among its peers in generating profit. Charter Communications Inc's Operating Margin has increased (81.25%) over the past five years, as shown by the following data: 2018: 12.50; 2019: 14.45; 2020: 17.60; 2021: 21.00; 2022: 22.66. Furthermore, Charter Communications Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 43.12; 2019: 42.79; 2020: 44.07; 2021: 45.03; 2022: 45.32. This trend underscores the company's growing proficiency in transforming revenue into profit. Charter Communications Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Charter Communications Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 17.1%, which outperforms better than 82.89% of 380 companies in the Telecommunication Services industry. Moreover, Charter Communications Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 20.8, and the rate over the past five years is 19.4. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Charter Communications Inc's unparalleled position for potential outperformance. This analysis suggests that Charter Communications Inc is a promising investment opportunity for those seeking robust growth and profitability. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
