Charter Communications, Inc.Full report →1 / 14
CHTRNASDAQThe short version

Charter Communications, Inc.

Charter Communications is an $18B US broadband and cable operator, marketed as Spectrum, whose shares fell about 70% since May 2025 as fiber and 5G home internet take broadband share. This is a framework-fit test, not investment advice.

From a $427.25 peak in May 2025, the shares fell 70.6% over 402 days to a $125.54 low in June 2026 as broadband subscriber losses mounted.
$129.22
Share price (Jul 22 2026)
$17.8B
Market cap
21%
Adjusted FCF yield (current)
−70.6%
Off the May-2025 peak
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The numbers

$54.8B of revenue, $4.4B of free cash flow, a 41% smaller share count since 2016

FY2020 → FY2025as reported · $
Revenue$54.8B−1%
Operating margin23.6%−0.2pp
Net income$5.0B−2%
EPS$36.21+4%
Free cash flow$4.4B+40%
Open the full statements →
As-reported statements, FY2020→FY2025.
  • One network, several products. Internet booked $23.8B of the $54.8B FY2025 revenue; video, mobile, voice and business services make up the rest — all sold over a single connectivity network under the Spectrum brand across 41 states.
  • Cash has roughly halved. Reported free cash flow fell from an $8.6B peak (FY2021) to $4.4B (FY2025) under decade-high capex near 21% of revenue and a ~$5.5B annual interest bill.
  • Fewer shares. Buybacks cut the count from 234.8M (FY2016) to 137.7M (FY2025) — but the pending, stock-funded Cox merger would inflect the count upward at close.
The fit

Does not fit the framework (P1 not met); contested: X2, P4a

P1 fails
Year-10 durability gate
21% vs 25%
Adjusted FCF yield vs bar
0.55
Probability the damage is temporary
Low
Confidence tier
Framework reference lines, not scores or grades.
  • The gate decides it. Charter clears both universe screens, but year-10 durability is binary — any real doubt fails it — and broadband, the profit core, is losing subscribers to fiber and 5G home internet. All four jury seats agreed; probability 0.51.
  • The strongest counter-fact. The entry case is real: a 70.6% drawdown, a 21% current FCF yield, a share count down 41% since 2016. Those clear several framework lines — but none offsets a failed gate, and the structural-decline exclusion (X3) also hit.
  • Two split calls. Whether the balance sheet can outlast without pivoting to debt paydown (P4a) and the CEO promotion pattern (X2) are each contested 2–2 across model families — neither is load-bearing under the gate.
What Charter is

A single broadband network sold as Spectrum, with video and mobile bundled on top

FY2025 revenue by line ($B)
Internet is ~43% of revenue and the anchor of the bundle.
  • The network is the business. Charter passes 58 million homes across 41 states and sells internet as the anchor product; the FY2025 operating margin of 23.6% is the widest in its peer set.
  • Domestic and essential. 100% of revenue is US connectivity, cable and mobile — no China exposure, no auto, no foreign listing. Broadband is the profit engine the durability question turns on.
The dislocation

A 70.6% fall over 402 days, from a merger-announcement peak

Daily close, May-2025 peak to June-2026 trough.
  • A real, dated trigger. The April 24, 2026 print — quarterly Internet losses doubling to 120,000 — drove a 25.5% single-day fall on 11.9x median volume. Peak-leg volume ran 3.9x the prior median.
  • Estimates fell alongside. Consensus FY2027 EPS was cut from $47.37 to $44.67 over the same window, so price and estimates dropped together — a durability repricing as much as a fear spike.
Diagnosis

Temporary capex trough or a structural reset — the trial split near 50/50

0.55
Probability the damage is temporary
0.57 / 0.41 / 0.55
Three blind judges
−2.2%
Q1'26 Adjusted EBITDA YoY
−70.6%
Equity move to trough
The trial's carried probability, not a target.
  • Both sides are real. For temporary: capex is guided from ~$11.7B (2025) to under $8B (2028) on roughly flat EBITDA, mechanically freeing several billion of FCF. For permanent: internet customers, penetration and ARPU are all falling on a growing footprint.
  • The tell. Realized earnings damage is modest so far — Q1'26 Adjusted EBITDA down just 2.2% year over year — so the 70.6% equity move runs well ahead of the impairment booked to date. Which diagnosis holds decides the case.
Year-10 durability

The profit core is shrinking, and price is the only offset

Residential Internet customers (M)
Peaked FY2023; penetration of passings slid 56.3% → 54.0%.
  • Losses are widening. Total Internet customers fell 464,000 year over year to 29.56M by March 2026, and quarterly losses roughly doubled to 120,000 as fiber overbuild and fixed-wireless took share.
  • The top line rolled over. Revenue rose every year to a $55.1B peak (FY2024), then slipped 0.56% to $54.8B (FY2025) — the first annual decline in the series. Pricing offsets a shrinking base, but only for so long.
Yield versus the bar

Adjusted FCF yield sits below the 25% levered bar on every basis

Adjusted FCF yield vs the levered bar (%)
  • Below the line. Net debt / Adjusted EBITDA of 4.15x classifies Charter as levered, setting a 25% bar. The current adjusted yield of 21.0% sits 396 bps under it — outside the 150-bps lean-fit window — and the 3-year average of 16.6% is 837 bps below.
  • Neither number is clean. The current reading is flattered by a one-off cash-tax benefit; the 3-year average is depressed by peak-capex years. On the framework's basis, the yield does not clear the bar today.
The path back

Consensus has forward cash flow recovering by 2028 — on one variable

Consensus free cash flow path ($B)
Standalone consensus; excludes the pending Cox merger.
  • One lever. The lift comes from capex fading toward $8B against roughly flat Adjusted EBITDA — management guides capital intensity to 13–14% of revenue by 2028. Probability the forward yield clears the bar within three years: 0.625.
  • The catch. It is forward guidance from a team that missed the prior capex-fade, and the pending Cox merger — new shares, a lower leverage target — is not in the standalone consensus.
Self-help

A 41% share-count cut — but a stock-funded merger reverses it at close

Shares outstanding (M)
  • Executed, not just authorized. About $71B of buybacks since 2016 took the count from 234.8M to 137.7M shares — a 5-year CAGR of −8.0%, the opposite of the framework's rising-count fail (P4b met).
  • Two counter-facts. The program was throttled 92% at the capex peak, much of it bought at $225–$384 versus ~$129 today, and the equity-funded Cox merger would inflect the count upward at close.
Balance sheet

It can refinance the near maturities; the allocation question is contested

$94.3B
Net debt
4.15x
Net debt / Adjusted EBITDA
$1.06B
2026 maturities
~96%
2026 interest as % of FCF
P4a contested 2–2: headroom versus a forced-allocation risk.
  • Contested 2–2. Two jurors read the small near maturities ($1.06B in 2026), ~$4.9B of cash and revolver access as comfortable headroom; two read the post-Cox 3.5–3.75x leverage target as capital allocation competing with buybacks when repurchases matter most.
  • The counter. Management delevers by growing EBITDA into a fixed leverage band, not by diverting FCF to forced paydown — but 2026 cash interest of ~$4.82B already absorbs about 96% of company-defined free cash flow.
The clock

Re-rating needs operational repair; the levers are dated prints

What has to happen, and roughly when
MarkerWindowWhat it signals
Q2/Q3 2026 prints2H 2026Internet loss-rate; pricing offset
Capex roll-off2026–2028Path to 13–14% of revenue
Cox/Liberty closePendingNew shares, lower leverage target
Network build finish2027Whether the FCF inflection arrives
  • Repair, not a reset. The gap closes only if Internet losses flatten and the capex fade lands — testable at the 2026–2027 prints, with the network-build finish as the structural marker.
  • Optionality exists. Listed LEAPS run to January 2028, beyond the 18-month target, at elevated implied volatility (a 33–83 range, near the top) — a dated, web-sourced fact, not advice (I1 not verifiable).
The re-rating math

The framework's target price is not computable here, and the gate settles it anyway

Not computable
Framework target price
−396 bps
Current yield vs the 25% bar
P1 gate
What settles the result
Adjusted FCF and balance-sheet class could not be struck deterministically.
  • Why no target. Adjusted FCF (FCF less stock comp less average deal spend) is not computable — stock-based compensation is missing from the cash-flow feed for every year — and balance-sheet class came back unknown, so the bar and normalized FCF base cannot both be struck.
  • What can be said. Closing the 396-bps gap to the bar relies on the same single variable as the forward path: the guided capex roll-off landing on flat EBITDA. No target, price or return is asserted — and the failed year-10 gate settles the result regardless.
What to watch

Cheap, cash-generative and shrinking its share count — but the year-10 durability gate does not hold

Read the full report →

This distills a fixed, tab-by-tab fit test — measured against the framework's own reference lines, not investment advice.

Compiled from the full report · 2026-07-26 · For information, not investment advice.