Thinking about what to do with Charter Communications stock right now? You are not alone. After a notable slump, with shares recently closing at $253.16 and posting a year-to-date return of -27.5%, there is a lot of curiosity about whether the market is discounting too much, or if caution is still warranted. Over the past five years, the stock has lost 57.3% of its value, and although the last month showed a milder slip of -5.5%, the long-term trend has been unmistakably downward.
This is not just about bad luck. Investors are reacting to sector trends, mounting competition, and macro pressures that have changed perceptions of risk in the cable industry. Yet, when you crunch the numbers, Charter scores a 5 out of 6 on standard value checks, suggesting it is undervalued by nearly every measure that matters. That is a strong signal, but as you will see, those numbers only tell part of the story.
So, how do those different valuation methods stack up? And is there a smarter way to measure what Charter is really worth? Here is a breakdown of how each approach assesses Charter’s current share price, followed by a perspective that might surprise you.
Approach 1: Charter Communications Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow (DCF) model estimates a company’s true worth by forecasting its future cash flows and then discounting them back to today’s value. The aim is to assess what all those future cash inflows are worth in present terms, considering both near-term projections and more distant guesses.
For Charter Communications, the latest reported Free Cash Flow sits at $4.1 Billion. Analysts expect this figure to remain on an upward trajectory, forecasting Free Cash Flow to hit $8.5 Billion by 2028. Because analysts only project five years ahead, further growth into the next decade is extrapolated, showing Free Cash Flow rising as high as $13.5 Billion by 2035 according to Simply Wall St’s model.
Running these projections through the DCF model, the estimated intrinsic value for Charter’s stock clocks in at $800.20 per share. With Charter’s current market price around $253, the DCF analysis suggests the stock is trading at a steep 68.4% discount to fair value. This is a significant gap, indicating that based on cash generation alone, Charter appears deeply undervalued by the market.
Result: UNDERVALUED
CHTR Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests Charter Communications is undervalued by 68.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
Approach 2: Charter Communications Price vs Earnings (P/E)
The Price-to-Earnings (P/E) ratio is a widely used valuation measure for profitable companies like Charter Communications because it directly links a company’s share price with its actual earnings. A lower P/E often suggests a stock is undervalued, but what is “fair” for each company depends on its future growth prospects and the risks it faces. Faster-growing and less risky businesses generally command higher P/E ratios, while slower growth or increased uncertainty usually push valuations lower.
Currently, Charter Communications trades at a P/E ratio of 6.6x. To put this in context, the average for Media industry peers sits at 19.3x, and the average across similar companies is 24.4x. At first glance, Charter’s shares seem cheap compared to both the industry and its peer group. However, these benchmarks do not account for the unique aspects of Charter’s growth potential, risk profile, or market position.
This is where Simply Wall St’s proprietary “Fair Ratio” comes into play. The Fair Ratio, calculated as 23.7x for Charter, aims to represent the most appropriate valuation multiple by considering factors beyond raw earnings, such as growth rates, profit margins, industry dynamics, market capitalization, and specific business risks. Unlike standard peer or industry comparisons, the Fair Ratio customizes the benchmark for Charter’s actual fundamentals and outlook.
Comparing the Fair Ratio of 23.7x to Charter’s current P/E of 6.6x reveals a significant gap. This suggests the stock is trading well below where it would be valued if investors accounted for all its core attributes and future prospects.
Result: UNDERVALUED
NasdaqGS:CHTR PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Charter Communications Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. In simple terms, a Narrative is your story behind the numbers. It is a way to combine your own assumptions about Charter Communications’ future revenue, earnings, and margins with the reasons you believe those outcomes are likely. Narratives are powerful because they link a company’s business story directly to a financial forecast and, ultimately, to an estimated fair value for its stock.
On Simply Wall St’s Community page, millions of investors can access Narratives as an easy and intuitive tool for making decisions. By comparing your chosen fair value with Charter’s current share price, Narratives help clarify whether you believe it is time to buy, sell, or simply watch. Unlike static models, Narratives are updated in real time as fresh news or earnings arrive, letting your view evolve whenever new facts are available.
For example, one investor’s Narrative for Charter might forecast aggressive growth from Spectrum Mobile, AI-driven efficiency improvements, and margin expansion, resulting in a fair value estimate as high as $500. Another, more cautious investor might worry about intense competition or high debt, leading to a bearish Narrative and a value closer to $223. With Narratives, the financial story you believe is just as important as the numbers themselves.
Do you think there’s more to the story for Charter Communications? Create your own Narrative to let the Community know!
NasdaqGS:CHTR Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
New: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com