Spectrum Mobile And AI Will Improve Service Efficiency

Charter Communications’ consensus price target edged down to $395.75 as analysts weighed ongoing network upgrades and potential cash tax relief against continued competitive pressures and decelerating ARPU growth.

Analyst Commentary

• Bullish analysts note Charter’s ongoing network upgrades and the momentum of its Spectrum Life Unlimited offering as drivers for improvement in broadband net subscriber losses.
• The expected reinstatement of 100% bonus depreciation under new fiscal policy could provide Charter with significant cash tax relief, supporting free cash flow and capital investment.
• Bearish analysts highlight persistent and intense sector competition, especially from fixed wireless and fiber providers, as a continuing risk hampering broadband subscriber growth and margins.
• Investor focus is shifting toward the tradeoff between volumes and margins, with margin pressures likely to offset sector-wide improvements in cash flow guidance.
• Upcoming deceleration of data ARPU growth is anticipated as promotional pricing anniversaries and seasonal factors affect near-term results, tempering the positive impact of previous price increases.

What's in the News

• Two class action lawsuits have been filed against Charter Communications and senior executives alleging federal securities law violations related to the company’s handling and disclosure of the end of the FCC’s Affordable Connectivity Program (ACP), Internet subscriber declines, and overstated EBITDA, resulting in a significant share price drop.
• Charter's Q2 2025 financial results highlighted a 0.5% year-over-year EBITDA growth, which would have missed estimates and shown a decline without a $45 million one-time benefit, alongside a net loss of 117,000 Internet customers, nearly double the decline from the prior quarter.
• Shareholders approved the Second Amended and Restated Certificate of Incorporation and are considering creating a new class of common stock, new Charter Holdings units, and preferred units with a $6.0 billion liquidation preference and a 6.875% dividend.
• The company repurchased 3.83 million shares (2.73% of outstanding) for $1.44 billion in Q2 2025, with cumulative repurchases reaching 71.67% of shares under the ongoing buyback.
• Charter announced new partnerships: with Disney to provide Hulu (With Ads) to Spectrum TV Select customers at no extra cost and restore eight Disney-owned channels to its lineup; with Nexar to leverage Spectrum’s wireless network for advanced road intelligence data; and with EverPass Media to expand live sports streaming to business customers via the Xumo Stream Box.

Valuation Changes

Summary of Valuation Changes for Charter Communications

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $400.79 to $395.75.
• The Future P/E for Charter Communications has significantly fallen from 12.11x to 10.69x.
• The Consensus Revenue Growth forecasts for Charter Communications remained effectively unchanged, at 0.9% per annum.