Is Charter Communications (CHTR) a Great Value Stock Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Charter Communications (CHTR). CHTR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Investors will also notice that CHTR has a PEG ratio of 0.42. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CHTR's industry currently sports an average PEG of 0.91. Within the past year, CHTR's PEG has been as high as 0.93 and as low as 0.41, with a median of 0.59.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CHTR has a P/S ratio of 1.43. This compares to its industry's average P/S of 1.53.

Finally, investors should note that CHTR has a P/CF ratio of 5.01. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CHTR's current P/CF looks attractive when compared to its industry's average P/CF of 6.71. Within the past 12 months, CHTR's P/CF has been as high as 12.14 and as low as 4.89, with a median of 7.79.

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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