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

Charter Communications, Inc.

Charter is the second-largest US cable-broadband operator — internet, mobile and video under the Spectrum brand across 41 states. Its shares fell 71% from a 2025 peak, then met a fixed five-pillar fit test.

From an $821 all-time high in September 2021, Charter round-tripped to $129: a $427 relief peak on the May 2025 Cox-merger news gave way to a 71% fall into a June 2026 trough.
$129
Share price
$17.8B
Market cap
21.0%
Adjusted FCF yield
−71%
Peak-to-trough
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The statements

Fifty-five billion in revenue, flat; free cash flow squeezed by a capex peak

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 before any argument.
  • Revenue. $54.8B in FY2025, down 0.6% — the first annual decline in the series, after a decade that compounded from $29B in 2016.
  • Free cash flow. $4.4B in FY2025, off an $8.6B peak in 2021 — a capex bulge ($11.7B, ~21% of revenue), not the operating business, drove the fall.
  • Leverage. $94.3B of net debt against ~$21.6B EBITDA — about 4.4x — so the $17.8B equity is a thin 16% sliver of a ~$112B enterprise.
The fit

Does not fit the framework (P1 not met); contested: P2, P4a

Fails
Year-10 durability gate (P1)
21.0%
Adj. FCF yield vs 25% bar~400 bps short
0.36
P(temporary) diagnosis
Medium
Confidence tier
The pillar ledger, from the deterministic tally.
  • The gate decides it. Year-10 revenue-and-FCF-higher needs very high conviction; four jurors across two model families put the probability at 0.42. A failed gate offsets nothing downstream, by construction.
  • The doubt is revenue, not cash. Total Internet customers fell from 30.59M (2023) to 29.68M (2025); FY2025 Internet revenue rose on price alone — +$785M rate against −$380M from fewer customers.
  • The surviving counter-fact. Connectivity revenue (internet plus mobile) still grew 4.1% to $27.5B and is half the top line, and mobile grew 22% — a flat-to-higher year-10 top line is plausible, just not high-conviction.
The business

A regional broadband utility: 58 million homes passed, monetized every month under Spectrum

FY2025 revenue by line
Total FY2025 revenue $54.8B.
  • Internet is the core. $23.8B, 43% of revenue, sold over a hybrid fiber-coaxial plant passing 58M homes across 41 states.
  • Mobile is the growth engine. From a 2017 standing start to 11.4M lines and $3.8B of service revenue, run as an operator riding Verizon's network.
  • Video is the melting legacy. Cord-cutting took residential video from 16.8M subscribers (2016) to 12.1M; the line fell 9.4% in FY2025.
The dislocation

Down 71% in 402 days, with volume peaking four sessions before the bottom

Peak $427.25 (16 May 2025) to trough $125.54 (22 Jun 2026).
  • Two earnings days did the damage. −18.5% on 25 Jul 2025 and −25.5% on 24 Apr 2026, on broadband subscriber losses and soft EBITDA — not a smooth slide.
  • The fear gauge fired. Traded volume ran 3.9x its pre-peak median on the smoothed gauge, and the single heaviest day (16x) landed four sessions before the $126 trough.
  • The peak was a deal high. The $427 top was set the day the $34.5B Cox merger was announced, so part of the fall unwinds deal enthusiasm, not only fear.
Damage math

The equity fell 71%; forward estimates fell in single digits — or not at all

Price moved far more than the numbers
MeasureChange
Market cap (from peak)−71%
Enterprise value (from peak)−28%
FY2027 EPS estimate (180d)−6%
FY2027 revenue estimate (180d)−3%
Forward FCF (2026→2029)+72%
The near-term numerator barely moved.
  • A small numerator. Revenue is flat, adjusted EBITDA rose 0.6% in FY2025, and forward EPS is rising — the variable that fell is free cash flow, and it fell on self-imposed capex.
  • Leverage amplified it. Net debt held near $94B, so the whole 28% enterprise decline landed on an equity that entered as 40% of EV and now stands at 16%.
  • The gap depends on the diagnosis. Temporary reading: ~$5B of NPV destroyed against ~$44B of price — a ~$39B overshoot. Permanent reading: ~$39B destroyed — the gap nearly closes.
Yield vs the bar

A 21% adjusted FCF yield today — about 400 bps under the 25% levered bar

Adjusted FCF yield vs the levered bar
Adjusted FCF = reported FCF − SBC − 5-yr avg acquisitions.
  • Below the bar today. FY2025 adjusted FCF ($3.7B = $4.4B FCF − $0.7B SBC) on the $17.8B cap is 21.0%; on the three-year average, 16.6%.
  • The 25% ruler is the levered one. Net debt/EBITDA of ~4.4x puts Charter in the levered class, so the 25% line — not the 8–9% fortress or 10% moderate one — applies.
  • Normalization clears it. As capex falls below $8B, normalized adjusted FCF is ~41% (stress case ~30%); consensus clears 25% on an SBC-adjusted basis by FY2027.
The cash-flow cliff

Free cash flow fell as a finite capex bulge peaked; consensus has it nearly doubling

Capex and free cash flow ($B)
Actuals FY21–FY25; consensus thereafter.
  • Capex, not the business. Operating cash flow held near $16B throughout; capex rose from $7.6B (2021) to $11.7B (2025) on a DOCSIS 4.0 upgrade plus subsidized rural builds.
  • Management dates the roll-off. 2025 was called the peak; run-rate capex should fall below $8B by 2028 — worth about $28 of free cash flow per share on today's count.
  • The risk it doesn't. If the ~$11.4B is a structural maintenance level rather than a cycle, the depressed FCF is the true level — the trial's question.
Self-help

$71B of buybacks retired 41% of the shares — and each turn is now far cheaper

−41%
Share count, 2016–2025
$71B
Buybacks executed over 10 years
~29%
Of float $5.1B retires at $129
$225
Q1 2026 avg buyback pricevs $129 now
Share count 234.8M → 137.7M.
  • Executed, not authorized. Share count fell from 234.8M to 137.7M (−8.0% five-year CAGR) on ~$71B of real repurchases; SBC is a negligible ~$673M a year, so no rising-count fail.
  • The dislocation multiplies each turn. The $5.1B spent in 2025 retired ~15M shares; at $129 the same cash retires ~40M — nearly 29% of the float.
  • The counter-fact (P4a contested). Management cut post-Cox target leverage to 3.5–3.75x, heeding shareholders' de-lever preference — the framework's own falsifier of capital allocation tilting toward paydown.
Durability

Capital intensity guards the wireline flank; the growing threat is wireless

The year-10 gate, both legs
LegReading
Free cash flowDefensible — rises toward ~$8.4B by 2029 as capex rolls off
RevenueDoubtful — Internet base down two years, held by price alone
Market structureRegional duopoly, porous to fixed wireless
Regulatory barrierNone — franchises non-exclusive, subsidies fund entrants
Any proper doubt fails a binary gate.
  • The moat is half-porous. Sunk-cost plant (58M passings, ~$100 per passing to upgrade) blocks a new wireline rival, but fixed wireless rides existing cell towers and bypasses the last mile.
  • The entrants are structural. T-Mobile is now the fifth-largest ISP with 12M fixed-wireless lines; AT&T heads to 40M fiber passings — capacity added by balance-sheet-rich rivals, not an execution stumble.
  • The counter. Connectivity revenue still grew 4.1% in FY2025, mobile has a long runway, and usage compounds near 825 GB a month — enough to keep the top line flat, not enough for high conviction.
The clock

A dated capex roll-off, against a drawdown twice as deep as anything Charter has round-tripped

Drawdown depth by episode (%)
Only the two shallow episodes have completed a round trip.
  • The re-rating is mechanical, not a repricing cycle. Capex steps down first in 2027 (~$9.5B) and lands below $8B by 2028; consensus FCF rises ~70% to $8.4B by 2029.
  • The near catalysts are dated. The Cox close is targeted for mid-2026 (restoring buybacks and resetting leverage); the FCF ramp first prints in the FY2027 numbers.
  • Base rates cut against a fast repair. Charter's only completed drawdowns were −35% and −32%; a −71% fall (−85% from the 2021 high) has no precedent in its own record.
The diagnosis

Temporary or permanent — three blind judges put temporary at 0.36

NPV destroyed vs ~$44B price removed
ReadingNPV hitvs price
Temporary (p = 0.36)~$5B~$39B gap
Permanent (p = 0.64)~$39Bgap closes
The mispricing exists only under the reading judged less likely.
  • The judges leaned to permanence. P(temporary) = 0.36, with seats at 0.36 / 0.36 / 0.58; reading order moved the mean only 0.11, so it is not a sequence artifact.
  • Why it leaned. The temporary case's keystone — free cash flow nearly doubling — rests on vendor projections, while the permanent case's evidence (subscriber losses, pricing erosion) is filed fact.
  • Even under permanence. A declining-perpetuity value is about $296 a share against the $129 price — the equity overshoots unless discounted near 27%, defensible for a claim that is 16% of a $112B EV.
The re-rating math

The float retires in about 2.5 years of forward cash flow — a price making a strong claim

Years of free cash flow to retire the entire float
At $129 and a $17.8B market cap.
  • The deterministic re-rating math is unavailable. The tally records it as missing — adjusted FCF and its yield are not-computable from the feed (SBC absent) — so the price-at-bar and the upside cannot be formed deterministically.
  • What the surviving numbers show. Consensus FCF rises from ~$5.0B to $8.4B by 2029 — a forward yield climbing from ~28% to 47% on today's cap — and the float retires in ~2.4–2.9 years.
  • The condition. The forward path needs the capex roll-off on schedule and revenue and EBITDA holding while it does — the exact condition the trial rated 36% likely.
This distills a fixed fit test; the full arithmetic and its gaps live in the report.
What to watch

A real capital-fear dislocation on a genuine cash engine — but a franchise whose year-10 revenue lacks high conviction.

Read the full report →

This distills a fixed five-pillar fit test, built tab by tab; the full report carries the workings, the sources, and every counter-fact.

Compiled from the full report · 2026-07-23 · For information, not investment advice.