EarthLink Holdings Corp

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ELNK : NASDAQ : Technology
$6.20 up 0.07 | 1.14%
Today's Range: 6.03 - 6.22
Avg. Daily Volume: 565,300
09/30/16 - 4:00 PM ET

Financial Analysis


EARTHLINK HOLDINGS CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. EARTHLINK HOLDINGS CORP has weak liquidity. Currently, the Quick Ratio is 0.90 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 43.40% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)240.36283.66
EBITDA ($mil)52.562.27
EBIT ($mil)18.9314.54
Net Income ($mil)4.12-9.92


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)76.8387.36
Total Assets ($mil)662.52799.07
Total Debt ($mil)471.08568.52
Equity ($mil)27.9949.46


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin53.8555.21
EBITDA Margin21.8421.95
Operating Margin7.875.13
Sales Turnover1.541.43
Return on Assets-1.63-5.61
Return on Equity-38.66-89.78
Debt Q2 FY16 Q2 FY15
Current Ratio1.061.29
Debt/Capital0.940.92
Interest Expense0.013.31
Interest Coverage0.01.09


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)105.48103.65
Div / share0.050.05
EPS0.04-0.1
Book value / share0.270.48
Institutional Own % n/a n/a
Avg Daily Volume589223.0702676.0

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 23.29 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 5.88. 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 38.68   ELNK 3.88 Peers 25.47

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 82.40 Peers 24.75   ELNK NA Peers 0.23

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

ELNK is trading at a significant premium to its peers.

 

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 23.29 Peers 5.88   ELNK 75.00 Peers 37.03

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 0.64 Peers 9.47   ELNK -10.34 Peers 28.36

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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