2024-04-22 09:00:42 ET
Summary
- Charter Communications stock has fallen 23% in the past year due to weak internet customer growth and a large debt load.
- Q4 results showed weakness in video and disappointing internet results, with mobile growth not enough to offset losses.
- Charter's Q1 results are unlikely to show an acceleration, and capex needs will be in focus, alongside internet trends.
- Concerns remain about Charter's capital structure, high debt load, and declining free cash flow, making it a risky investment, though CHTR stock's valuation is no longer as stretched.
Shares of Charter Communications ( CHTR ) have been a poor performer over the past year, losing nearly 23%, in what has been a bull market. Weak internet customer growth combined with a very large debt load have pressured shares significantly. In December, I rated Charter a “ sell ” as I worried its large debt load could force the company to reduce buybacks given weak growth and strained free cash flow. Since then, shares have fallen by about 31% while the S&P 500 has risen by 5%. Frankly, shares have fallen even more sharply than I expected, and so with Q1 results set to be released April 26 th , now is a good time to revisit CHTR. While fundamentals are challenged, valuation is better reflecting this but I see reasons to remain cautious....
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For further details see:
Charter Q1 Earnings Preview: Internet Adds And CapEx Needs Are In Focus