Charter Communications Inc (CHTR, Financial), a prominent player in the telecommunications services industry, has recently witnessed a notable uptick in its stock performance. With a current market capitalization of $52.88 billion, the company's stock price stands at $367.12, reflecting a 1.99% decrease over the past week. However, looking at a broader timeline, Charter has seen a significant 21.66% increase over the past three months. This growth trajectory is underscored by the company's current GF Value of $460.1, suggesting that the stock is modestly undervalued.
Overview of Charter Communications
Charter Communications Inc operates under the Spectrum brand and is the second-largest cable operator in the United States. The company emerged from the 2016 merger of Legacy Charter, Time Warner Cable, and Bright House Networks. Today, Charter provides a range of services including TV, internet, and phone to approximately 57 million U.S. homes and businesses. It also owns several sports and news networks. This extensive network and service offering underline Charter's significant footprint in the telecommunications sector.
Assessing Charter's Profitability
Charter Communications boasts a high Profitability Rank of 9/10, reflecting its robust financial health. The company's operating margin stands at an impressive 23.18%, which is superior to 84.62% of its peers. Additionally, its Return on Equity (ROE) is 43.03%, outperforming 94.23% of competitors, and its Return on Assets (ROA) at 3.17% is better than 54.95% of the industry. The Return on Invested Capital (ROIC) is also commendable at 6.68%, higher than 63.28% of the sector. These metrics not only highlight Charter's efficiency in utilizing its assets but also its ability to generate profitable returns consistently over the past eight years.
Growth Metrics of Charter Communications
Charter's Growth Rank is also impressive at 9/10. The company has demonstrated strong growth in revenue per share over the past three and five years, with rates of 16.10% and 15.00% respectively, outperforming a significant majority of its peers. Its EPS without NRI has grown by 21.90% over the past three years and an astounding 41.80% over the past five years. Looking ahead, the estimated EPS growth rate for the next three to five years is projected at 8.18%. These figures not only reflect Charter's past growth but also its potential for future expansion.
Significant Shareholders in Charter Communications
Charter's stock is held by notable investors, which adds an extra layer of credibility to its market standing. The top holder, Dodge & Cox, owns 11,563,786 shares, representing 8.03% of the shares outstanding. Following them, Warren Buffett (Trades, Portfolio) holds 3,828,941 shares, accounting for 2.66%, and Richard Pzena (Trades, Portfolio) owns 2,848,459 shares, making up 1.98% of the shares.
Competitive Landscape
When compared to its competitors, Charter stands out with a significantly higher market cap of $52.88 billion. Its closest competitors, Liberty Broadband Corp (LBRDA, Financial) and Liberty Global Ltd (LBTYA, Financial), have market caps of $9.32 billion and $7.09 billion respectively, while Frontier Communications Parent Inc (FYBR, Financial) follows closely with a market cap of $6.94 billion. This comparison not only highlights Charter's dominance in the market but also its substantial scale advantage.
Conclusion
Charter Communications Inc exhibits strong profitability and growth metrics that make it an attractive investment opportunity. Despite recent price volatility, the company remains modestly undervalued according to its GF Value. Supported by significant holdings from reputable investors and a robust competitive position, Charter is well-positioned for continued success in the telecommunications industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
