Charter: Cheaper Than In March 2020 After Q1 Results

(Preview) Company Update (CHTR US)

Summary

• Charter stock lost 16% last week as U.S. Cable firms reported Q1 2022 results; its market capitalization is now lower than in March 2020.

• Q1 EBITDA grew 5.4% year-on-year, and Free Cash Flow / Share grew 29.4%, but sequential Internet customer growth was only 0.6%.

• Management attributed the deceleration to macro factors such as lower move churn, which should normalize over time, not competition.

• This view is supported by record low churn, Charter's local market observations, as well as results reported by competitors.

• At $428.49, Charter can more than triple by 2025 year-end on reduced P&L forecasts, as buybacks are now done at lower prices. Buy.

Introduction

Charter shares lost 7.2% on Friday (April 29) after Q1 2022 results, ending down 16.2% in a week where peers Comcast and Altice USA also released earnings.

CHTR stock has now nearly halved since peaking above $825 last September, and has lost 16% since we initiated our Buy rating in January 2020.

While Charter's share price is st…