Focusing on Charter Communications’ Current Valuation

On July 24, 2017, AT&T (T) was the largest US telecom giant by market capitalization at ~$222.7 billion, followed by Verizon (VZ) at ~$178.3 billion. Meanwhile, Charter Communications (CHTR) had a market capitalization of ~$103.0 billion, as seen in the chart below.

In the July 24, 2017, trading session, Charter Communications stock closed at $348.08, closer to its upper Bollinger Band level of $351.09. This indicates that Charter’s stock is overbought.

On July 24, 2017, Charter Communications was trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of ~10.3x, which was higher than AT&T and Sprint (S) at ~6.4x and ~5.8x, respectively.

Charter was trading at a forward PE (price-to-earnings) multiple of ~41.6x on the same date, which was more than that of AT&T and Verizon at ~12.3x and ~11.5x, respectively.

Charter Communications’ short interest ratio (or short interest as a percentage of its shares outstanding) on July 24, 2017, was ~4.9%. Usually, when a stock’s short interest ratio is more than 40%, it implies that investors expect a correction in the stock’s price.