Is Charter Communications a Bargain After a 41% Slide and DCF Upside in 2025?

• If you have been wondering whether Charter Communications at around $206 a share is a bargain or a value trap, you are not alone. This piece is written exactly for that question.
• The stock has bounced about 6.3% over the last month but is still down roughly 41.3% over the past year and about 68.5% over five years, a combination that often signals either deep value or deep trouble.
• Recently, attention has focused on Charter's ongoing network investments, competitive jostling with other broadband and wireless providers, and regulatory scrutiny around cable and data markets. All of these factors shape how investors think about its long term cash flows. At the same time, sentiment around the broader communications and media space has been shifting as markets reassess what sustainable growth and pricing power look like for legacy cable players.
• On our framework, Charter currently scores a 5/6 valuation check, suggesting it screens as undervalued on most of the metrics we care about. Next we will unpack those methods in detail before finishing with a more holistic way to think about what this valuation really means for long term investors.

Find out why Charter Communications's -41.3% return over the last year is lagging behind its peers.

Approach 1: Charter Communications Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to the present.

For Charter Communications, the latest twelve month Free Cash Flow is about $4.5 billion, and analysts expect this to rise steadily as the network footprint and pricing power evolve. Simply Wall St uses analyst forecasts for the next few years and then extrapolates further, with projections reaching roughly $14.8 billion of Free Cash Flow by 2035. All of these projected cash flows, expressed in $, are discounted using a 2 Stage Free Cash Flow to Equity model to arrive at an intrinsic value estimate of about $830.50 per share.

Compared with the current share price around $206, the DCF suggests the stock is roughly 75.1% undervalued. This indicates that the market may be heavily discounting Charter’s future cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Charter Communications is undervalued by 75.1%. Track this in your watchlist or portfolio, or discover 918 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Charter Communications.

Approach 2: Charter Communications Price vs Earnings

For profitable businesses like Charter, the Price to Earnings ratio is often the cleanest way to judge valuation because it links what you pay today to the profits the company is generating right now. In general, faster growth and lower risk justify a higher PE, while slower growth or greater uncertainty should pull a reasonable multiple down.

Charter currently trades on a PE of about 5.2x, which is far below both the broader media industry average of roughly 16.1x and a peer average of about 22.9x. Simply Wall St’s proprietary Fair Ratio for Charter is 19.5x, which reflects what investors might reasonably pay given its earnings growth outlook, margins, risk profile, industry and size.

The Fair Ratio is more useful than a simple peer or industry comparison because it adjusts for company specific factors like growth, profitability, leverage, and market cap, rather than assuming every media stock deserves the same multiple. With Charter’s actual PE of 5.2x sitting well below the 19.5x Fair Ratio, this framework points to the shares looking materially undervalued on an earnings basis.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1460 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Charter Communications Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple, story driven explanations of why you think a company like Charter Communications deserves a particular fair value based on your assumptions for its future revenue, earnings and margins, and which link that story to a quantified forecast and fair value that you can easily compare with today’s share price to help you decide between buying, holding or selling. On Simply Wall St’s Community page, used by millions of investors, you can pick or build a Narrative that matches your view, and it will automatically refresh as new information like news or earnings arrives, so your fair value stays aligned with reality rather than going stale. For example, one Charter Narrative might lean toward the bullish end of the current range, closer to a fair value around $500, assuming Spectrum Mobile growth, DOCSIS 4.0 upgrades and AI enabled efficiency drive stronger margins. Another more cautious Narrative might sit nearer $223, assuming fiber competition, ACP changes and high leverage constrain long term growth and keep the multiple lower.

Do you think there's more to the story for Charter Communications? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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