Is Charter Communications (CHTR) Stock Undervalued Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Charter Communications (CHTR). CHTR is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also note that CHTR holds a PEG ratio of 0.43. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CHTR's industry currently sports an average PEG of 0.93. CHTR's PEG has been as high as 0.89 and as low as 0.41, with a median of 0.58, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CHTR has a P/S ratio of 1.33. This compares to its industry's average P/S of 1.39.

Finally, our model also underscores that CHTR has a P/CF ratio of 5.21. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.24. CHTR's P/CF has been as high as 12.14 and as low as 4.89, with a median of 7.51, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Charter Communications is likely undervalued currently. And when considering the strength of its earnings outlook, CHTR sticks out at as one of the market's strongest value stocks.

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