2024-02-15 06:21:13 ET
Summary
- Charter reported 61,000 broadband losses in 4Q23 and missed earnings expectations, causing shares to drop 17%.
- While FWA operators have been taking share from Cable, the growth will decelerate as operators are approaching their 2025 targets.
- Fiber overbuilders have been readjusting their deployment targets and looking to drive penetration rate and raise prices. Network upgrades will enhance Charter's competitive position.
- Shares are trading at a 5-year low. However, Charter has been generating more cash flow than five years ago. FCF will be under pressure, but CapEx will eventually normalize over time.
- Investment risks are the acceleration of the video business decline and intense competitive landscape as well as the possible impact of the ACP that could impact net adds.
Recap
In June last year, we wrote an article suggesting that Charter's ( CHTR ) fixed-line broadband net adds will pick up thanks to slowing Fixed Wireless Access ("FWA") growth , existing network upgrades , and accelerating rural build-out . Shares traded at $336, 60% down from their all-time high. The stock eventually climbed to nearly $460 per share before plummeting to below $300/share after the 4Q23 earnings release....
Read the full article on Seeking Alpha
For further details see:
Charter Q4'23 Earnings: Net Broadband Losses, Robust Mobile Net Adds, 8% FCF Yield