It's been a good week for Charter Communications, Inc. (NASDAQ:CHTR) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.4% to US$673. It was a credible result overall, with revenues of US$13b and statutory earnings per share of US$4.11 both in line with analyst estimates, showing that Charter Communications is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Charter Communications' 24 analysts is for revenues of US$51.0b in 2021, which would reflect a credible 4.3% increase on its sales over the past 12 months. Statutory earnings per share are predicted to expand 11% to US$20.26. In the lead-up to this report, the analysts had been modelling revenues of US$50.9b and earnings per share (EPS) of US$19.93 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$719, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Charter Communications, with the most bullish analyst valuing it at US$848 and the most bearish at US$565 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Charter Communications' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 5.8% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.3% annually. Factoring in the forecast slowdown in growth, it looks like Charter Communications is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Charter Communications. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Charter Communications going out to 2025, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Charter Communications that you need to take into consideration.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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