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EarthLink Holdings Corp
ELNK : NASDAQ : Technology
$5.56 -0.17 | -2.97%
Today's Range: 5.16 - 5.70
Avg. Daily Volume: 912,700
02/05/16 - 3:59 PM ET

Financial Analysis


EARTHLINK HOLDINGS CORP's gross profit margin for the third quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. EARTHLINK HOLDINGS CORP has weak liquidity. Currently, the Quick Ratio is 0.86 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 63.07% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY15 Q3 FY14
Net Sales ($mil)270.9290.95
EBITDA ($mil)57.7449.3
EBIT ($mil)11.242.59
Net Income ($mil)-10.52-1.95


Balance Sheet Q3 FY15 Q3 FY14
Cash & Equiv. ($mil)87.62129.61
Total Assets ($mil)768.03951.12
Total Debt ($mil)523.9607.92
Equity ($mil)37.13100.54


Profitability Q3 FY15 Q3 FY14
Gross Profit Margin54.8253.36
EBITDA Margin21.3116.94
Operating Margin4.150.89
Sales Turnover1.461.25
Return on Assets-6.95-34.71
Return on Equity-142.69-328.09
Debt Q3 FY15 Q3 FY14
Current Ratio1.011.24
Debt/Capital0.930.86
Interest Expense11.713.96
Interest Coverage0.960.19


Share Data Q3 FY15 Q3 FY14
Shares outstanding (mil)103.82102.28
Div / share0.050.05
EPS-0.1-0.02
Book value / share0.360.98
Institutional Own % n/a n/a
Avg Daily Volume947030.01006486.0

Valuation


HOLD. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 16.67 indicates a significant premium versus the S&P 500 average of 2.48 and a significant premium versus the industry average of 5.02. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, EARTHLINK HOLDINGS CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ELNK NM Peers 43.48   ELNK 3.74 Peers 24.00

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

ELNK's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ELNK is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ELNK NM Peers 18.79   ELNK NA Peers 0.27

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

ELNK's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ELNK 16.67 Peers 5.02   ELNK 83.91 Peers -4.89

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ELNK is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ELNK is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ELNK 0.55 Peers 8.77   ELNK -5.56 Peers 24.70

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ELNK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ELNK significantly trails its peers on the basis of sales growth

 

 

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