1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Charter continues to take advantage of strong demand for broadband service amid the pandemic, handily outperforming peers Comcast or Altice USA and our expectations. We’ve increased our expectations for customer growth, bumping our fair value estimate to $515 from $480. We still believe Charter’s stock price assumes an overly optimistic future and that its heavy debt load will produce high volatility as performance ebbs and flows.
Charter is the product of the 2016 merger of three cable companies, each with a decades-long history in the business: Legacy Charter, Time Warner Cable, and Bright House Networks. The firm now holds networks capable of providing television, Internet access, and phone services to roughly 52 million U.S. homes and businesses, around 40% of the country. Across this footprint, Charter serves 28 million residential and 2 million commercial customer accounts under the Spectrum brand, making it the second- largest U.S. cable company behind Comcast. The firm also owns, in whole or in part, sports and news networks, including Spectrum SportsNet (long-term local rights to Los Angeles Lakers games), SportsNet LA (Los Angeles Dodgers), SportsNet New York (New York Mets), and Spectrum News NY1.
