Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Charter Communications, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 0.9% to 1.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 21, DPO 11, DIO 60). At a 6.4% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 7.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $609.94 per share, suggesting CHTR is undervalued by 179.2% at the current price of $218.46.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 7,791 | 7,885 | 7,937 | 8,238 | 8,365 | 8,574 |
| (−) Net Interest | 4,912 | 4,971 | 5,004 | 5,194 | 5,273 | 5,405 |
| (+) D&A | 10,050 | 10,589 | 10,898 | 10,798 | 10,712 | 10,980 |
| EBITDA | 22,753 | 23,445 | 23,840 | 24,230 | 24,350 | 24,958 |
| (−) Tax | 1,655 | 1,676 | 1,687 | 1,751 | 1,777 | — |
| (−) CapEx | 10,249 | 10,373 | 10,441 | 10,837 | 11,003 | — |
| (−) ΔWC | 4,769 | 90 | 50 | 287 | 120 | — |
| Free Cash Flow (FCF) | 6,079 | 11,307 | 11,662 | 11,356 | 11,449 | — |
| Peers' EBITDA Multiple | 7.5x | |||||
| Terminal Value | 185,940 | |||||
| WACC / Discount Rate | 6.37% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,894 | 10,307 | 9,995 | 9,149 | 8,672 | 136,563 |
| Enterprise Value | 180,581 | |||||
| Projection Period | 44,018 | 24.4% | ||||
| Terminal Value | 136,563 | 75.6% | ||||
| (−) Current Net Debt | 96,644 | |||||
| Equity Value | 83,937 | |||||
| (÷) Outstanding Shares | 138M | |||||
| Fair Price | $609 | +178.9% | ||||
| WACC \ EV/EBITDA Exit Multiple | 3.5x | 5.5x | 7.5x | 9.5x | 11.5x |
|---|---|---|---|---|---|
| 4.4% | $140 | $432 | $725 | $1018 | $1310 |
| 5.4% | $108 | $387 | $666 | $945 | $1224 |
| 6.4% | $78 | $344 | $610 | $876 | $1142 |
| 7.4% | $49 | $303 | $557 | $811 | $1065 |
| 8.4% | $22 | $264 | $507 | $749 | $992 |
Current price: $218.46. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.