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On Monday, Loop Capital Markets adjusted its price target for Charter Communications (NASDAQ:CHTR) shares, increasing it to $430 from the previous $385, while maintaining a Hold rating on the stock. Currently trading at $373.65, Charter has shown impressive momentum with a 15.89% gain over the past week. The firm’s analyst noted Charter’s broadband subscriber losses were slightly worse than the sell-side consensus but still showed an improvement year-over-year. This performance was notably better compared to Comcast (NASDAQ:CMCSA)’s results announced last Thursday. According to InvestingPro analysis, Charter remains undervalued based on its Fair Value calculations.
Charter Communications has been working on its brand image with the Life Unlimited rebrand and introduced new competitively priced products. These efforts seem to be resonating with consumers, as indicated by the uptick in traction. The company has also seen its strongest Adjusted EBITDA growth in nearly three years at 4.8%, contributing to its impressive $22.15 billion EBITDA. Video subscriber losses have seen a significant improvement, and management is optimistic that the full benefits of seamless entertainment apps have not yet been fully realized in their results. InvestingPro data shows Charter maintains a strong financial health score, with particularly high marks in profitability metrics.
The primary growth driver for Charter has been its mobile services, which play a crucial role in the company’s bundled broadband/mobile offerings. The report also highlighted that capital expenditures were lower than expected, and free cash flow surpassed projections, although this was largely attributed to timing and working capital dynamics. Despite the highly competitive market, Charter has experienced increases in gross additions across its internet, video, and mobile services.
Charter’s management has pointed out that video and mobile churn rates have declined, while internet churn has remained stable. With capital expenditures projected to peak in 2025, Charter is expected to see a significant rise in free cash flow beginning in 2026. Based on these developments, Loop Capital has slightly raised its 2025 estimates for Charter Communications alongside the updated price target. With a market capitalization of $58.61 billion and trading at an attractive P/E ratio of 10.42, Charter shows promising value characteristics. Discover more detailed insights and 6 additional ProTips for Charter Communications with an InvestingPro subscription, including exclusive access to comprehensive Pro Research Reports.
In other recent news, Charter Communications reported its Q1 2025 earnings, surpassing both earnings per share (EPS) and revenue forecasts. The company achieved an EPS of $8.42, slightly exceeding the forecast of $8.41, and reported revenue of $13.7 billion, just above the projected $13.67 billion. RBC Capital increased its price target for Charter Communications to $395 from $385, maintaining a Sector Perform rating due to improved internet Average Revenue Per User (ARPU) trends and cost efficiencies. KeyBanc Capital Markets reiterated its Overweight rating on Charter Communications with a $500 price target, highlighting the company’s operating efficiency and improved ARPU despite lower broadband subscriber growth. KeyBanc also noted that Charter’s EBITDA surpassed consensus estimates, driven by a one-time benefit. Analysts from both firms expressed concerns over increasing broadband competition, with RBC Capital noting potential challenges from expanding fiber and fixed-wireless networks. Charter’s recent performance reflects a focus on mobile line additions and digital innovation, despite ongoing internet customer losses. The company anticipates capital expenditure reductions by 2028, which could further influence its financial outlook.
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