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Charter Communications, Inc. (NASDAQ:CHTR) received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$412 at one point, and dropping to the lows of US$321. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Charter Communications' current trading price of US$338 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Charter Communications’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Charter Communications
What's The Opportunity In Charter Communications?
Great news for investors – Charter Communications is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $454.22, but it is currently trading at US$338 on the share market, meaning that there is still an opportunity to buy now. However, given that Charter Communications’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Charter Communications generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Charter Communications' earnings over the next few years are expected to increase by 22%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since CHTR is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CHTR for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CHTR. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.