Charter Communications’ stock price remains under pressure as the cable industry faces major challenges amid cord-cutting. On Thursday, the CHTR stock closed at $336, down about 60% from its highest level in 2021. This decline has brought its market cap down to about $60 billion as the focus shifts to its quarterly earnings.
Charter Communications earnings ahead
Charter stock price dropped after Comcast, one of its top competitors, reported soft financial results. Its numbers showed that the cord-cutting trend continued in the last quarter, sending a warning sign for Charter.
Comcast said that it had 12.5 million customers, down from 14.1 million in the same period a year earlier. This is a sign that the cord-cutting trajectory is not slowing.
Its broadband business is also facing challenges, as customers continue to fall. As of December, it had 31.8 million customers, down from 32.25 million a year earlier.
These numbers came ahead of Charter Communications’ financial results. The most recent numbers revealed that Charter’s revenues rose by 1.6% in the third quarter to $13.8 billion. Its cost cutting measures helped to boost its profits during the quarter.
Adjusted EBITDA rose by 3.6% to $5.6 billion, while capital expenditures fell by 13.5% to $2.6 billion. The company’s revenue growth was mainly due to price adjustments, which helped offset its falling subscriber count.
Charter, the parent company of Spectrum, ended the last quarter with 31.7 million customers, down by 32.2 million in Q3’23.
The company’s business will likely continue facing challenges as people shift away from cable television. Analysts expect that its results will show that its revenue rose by 1.23% on a YoY basis to over $13.88 billion. The annual revenue will be $55 billion almost flat from a year earlier.
Analysts believe that, barring major development, its revenue will drop by 0.49% to $54.76 billion in 2025.
Therefore, most Charter investors, including Warren Buffett, hope that the company will continue reducing its share count over time. Its outstanding share count has dropped from almost 280 million in 2017 to 140 million today. These repurchases have, however, not boosted its earnings per share.
The average Charter stock price forecast by analysts is $404, up from the current $261. The most bullish analysts are from Keybanc and BNP Paribas.
Charter Communications stock price analysis
Charter stock chart by TradingView
The weekly chart shows that the Charter share price has remained in a tight range in the past few months. It has formed a symmetrical triangle, which is nearing its confluence level.
This triangle formed after the stock crashed from $825, which is part of a bearish pennant pattern. That could be a sign that it will have a strong bearish breakout, with the next level to watch being at $237, its lowest level in April 2024.
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