u/SelenaMeyers2024

Stock fell 89% from $78 to $8.44; company guided 0-2% growth vs prior 5%, EBITDA down to $320M from $450M, gross margins compressed from 35% to 22% due to Costco price pressure. Author believes the market overreacted; with market cap ~$1B and $500M remaining buyback authorization, the company could retire half the float, supporting a recovery to $25 (3x current price). Contrarian long on a fallen angel with massive buyback tailwind; bet on margin stabilization and mean reversion once price war subsides. Continued margin compression from Costco/pricing competition, further demand weakness, execution risk on buyback (if debt/cash flow issues arise).

CHTR’s revenue declines ~1% annually, but aggressive buybacks reduce share count, and a major capex cycle ends next year, causing FCF to jump roughly 50% without operational improvement. The market overreacted to a minor earnings miss, creating a temporary price dislocation below the author’s DCF estimate of $330; the upcoming FCF inflection should close the gap. Buy CHTR at current discounted levels ($182-187) anticipating a re-rating as FCF expands and buybacks accelerate, targeting long-term value realization. Revenue decline could accelerate due to cord-cutting or competition; capex may not decline as expected; macro headwinds or interest rate sensitivity; leverage concerns.