Home

CHTR — Deck

Charter Communications · CHTR · NASDAQ

Charter operates the second-largest U.S. cable network under the Spectrum brand, generating $54.8B of recurring fees from 31.8M Internet, mobile, and video customers nationwide.

$172
Price
$21.7B
Market cap
$54.8B
Revenue (FY25)
31.8M
Customer relationships
Trading near $205 when the Time Warner Cable merger closed in May 2016; quadrupled to a $823 peak in September 2021 on the COVID broadband boom; round-trip to $172 today, a 79% drawdown.
2 · The tension that broke the stock

Q1 split the debate down a single subscriber line; July 24 settles it

  • The break. Charter shed 120,000 Internet customers in Q1 2026, double the 59,000 a year earlier and the worst quarterly print in years. The stock dropped from $241 to $165 in five sessions; April 24's -25.5% single-day move was the worst in company history.
  • The walkback. CEO Chris Winfrey pulled the broadband-growth call entirely — 'I'm not projecting broadband relationship growth this year' — the first such retraction in modern company history, after telling the same analyst 'I do' in Q1 2025 at the year's best -60K print.
  • The verdict. Q2 2026 earnings on July 24 are the gating event. A -60K to -80K print matches the consensus model and re-rates the multiple toward 6.5×; -100K or worse confirms the step-change loss rate Goldman's $185 target and the Altice comp now imply.
Rare in this market — bull and bear both signed up to the same observable trigger on the same date.
3 · Variant perception

The market is reading volume losses as value losses; ARPU says otherwise

  • What the tape implies. 5.4× EV/EBITDA is roughly Altice — the distressed comp — and below the 2008 credit-crisis low for Charter itself. The market is pricing terminal decline, the way dial-up was priced in 2003.
  • What the numbers say. Residential ARPU has held at $118–119/month for three consecutive years, including through the 393K customer loss in FY25 and the 120K Q1 print. Adjusted EBITDA margin sits at an all-time-high 41.5%. Altice's ARPU is collapsing; Charter's is not.
  • The clean test. Q2 trending schedule line 4 — residential ARPU per customer relationship. A break below $116 alongside any net-add print validates the bear; sustained $119+ falsifies the structural-decay frame independently of the subscriber count.
The volume losses prove the market is shrinking; stable ARPU proves the price discipline holds. The bear thesis needs both.
4 · Money picture

Cheapest cable equity in 16 years sits in front of a mechanical capex cliff

5.4×
EV/EBITDA TTM 10-yr avg 9.6×
4.7×
P/E lowest since 2008
23%
FCF yield on $5.0B FY25 FCF
4.4×
Net debt/EBITDA target 3.5–3.75× post-Cox

The bull math is mechanical. Capex steps from $11.7B in 2025 to under $8B by 2028 as the rural BEAD build and DOCSIS 4.0 upgrades roll off — roughly $3.5B of incremental annual FCF, or $28 per share against a $172 stock. Earnings do not have to grow for FCF to nearly double. The leverage is structural — Charter has run a 4.0–4.5× stack for a decade — but each 100bps of refinancing rate now costs ~$960M of pre-tax FCF on the $96B debt pile, so the cliff has to arrive.

5 · What's about to close

Two summer 2026 deals reshape the operating base and the controlling-holder overhang

  • Cox ($34.5B). FCC cleared February 27, 2026; only the California PUC remains, with a hard September 15 DOJ deadline. Closes summer 2026, doubles broadband scale to ~70M passings, triggers a rebrand to 'Cox Communications' (Spectrum stays as the consumer brand). Synergy guide raised from $500M to at least $800M.
  • Liberty Broadband Combination. Closes alongside Cox. Eliminates a 41M-share, 29.1%-voting overhang, retires three Liberty-affiliated board seats, and ends the contractual $100M-per-month buyback floor that absorbed $1.2B of FY25 repurchases at Liberty's debt-service cadence rather than Charter's view of intrinsic value.
  • The calendar risk. If California PUC slips past September 15, the deal refiles with DOJ and slides into Q4 2026 or beyond — the merger-arb spread widens, the Liberty close defaults to June 30, 2027, and the entire 2026 catalyst path resets.
Two governance-positive events bundled into one press release: the affiliated buyback floor terminates and three controlling-holder seats vacate.
6 · Bull and Bear

Lean long, wait for confirmation — the asymmetry tilts up but Q2 broadband decides it

  • For. The capex cliff is mechanical: $11.7B to under $8B by 2028, with capex/D&A at 1.34× that cannot persist without writedowns. EBITDA does not need to grow a dollar for FCF to roughly double.
  • For. CEO Winfrey bought $1.2M at $172.23 on April 28; new director Wade Davis wrote a $1.0M day-one check at $173.72; both Code-P, non-10b5-1. Buybacks at sub-5× P/FCF on a share count already 57% smaller than 2017 are the most accretive U.S. cable deployment since 2009.
  • For. The Liberty Broadband Combination collapses the 42% controlling-holder voting block and ends the related-party buyback floor that took $1.2B of FY25 cash at Liberty's debt-service pacing — a governance reset with a calendared expiry, not a perpetual discount.
  • Against. Q1 2026's -120K Internet loss doubled prior-year and Winfrey withdrew the broadband-growth call — the most credible insider in the building moved his estimate down before the analysts did.
  • Against. The capex cliff has already slipped once: network-evolution completion pushed from 2026 to 2027 and the four-year program cost lifted from $4.6B to $5.4B. The same drivers — rural BEAD, urban node splits, mobile MVNO economics — can slip again into 2028.
  • Against. $5.4B of FY25 buybacks executed at an average $316.80 — booking ~$2.5B of mark-to-market loss — were paced by Liberty's debt service, not Charter's view of intrinsic value. Cox now re-loads ~$33B of debt at 7%-coupon refinancing rates against 5%-coupon paper rolling off.
My view — the asymmetry tilts up because the cliff is mechanical and two senior insiders signed personal checks at $172. The verdict flips to Avoid if Q2 prints another -100K or worse, or if FY26 capex tracks above the $11.4B guide.

Watchlist to re-rate: Q2 2026 print on July 24 (-60K to -80K validates; -100K or worse confirms break); Cox close before September 15 with pro-forma leverage at or under 3.9×; FY26 capex tracking inside the $11.4B guide; residential ARPU staying above $116.