Level 3 Communications Inc

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LVLT : NYSE : Technology
$58.15 up 0.37 | 0.64%
Today's Range: 57.85 - 58.43
Avg. Daily Volume: 2320400.0
07/25/17 - 4:02 PM ET

Financial Analysis


LEVEL 3 COMMUNICATIONS INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. LEVEL 3 COMMUNICATIONS INC has strong liquidity. Currently, the Quick Ratio is 1.54 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 7.14% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)2048.02051.0
EBITDA ($mil)677.0648.0
EBIT ($mil)357.0347.0
Net Income ($mil)95.0128.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)1954.01841.0
Total Assets ($mil)25071.025039.0
Total Debt ($mil)10888.011651.0
Equity ($mil)11081.010342.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin66.2666.16
EBITDA Margin33.0531.59
Operating Margin17.4316.92
Sales Turnover0.330.33
Return on Assets2.5613.73
Return on Equity5.8133.25
Debt Q1 FY17 Q1 FY16
Current Ratio1.621.28
Debt/Capital0.50.53
Interest Expense134.0135.0
Interest Coverage2.662.57


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)360.86357.01
Div / share0.00.0
EPS0.260.36
Book value / share30.7128.97
Institutional Own % n/a n/a
Avg Daily Volume2328058.02244411.0

Valuation


BUY. LEVEL 3 COMMUNICATIONS INC's P/E ratio indicates a premium compared to an average of 31.94 for the Diversified Telecommunication Services industry and a premium compared to the S&P 500 average of 24.66. To use another comparison, its price-to-book ratio of 1.90 indicates a discount versus the S&P 500 average of 3.07 and a significant discount versus the industry average of 3.46. The price-to-sales ratio is above the S&P 500 average, but well below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LVLT 33.04 Peers 31.94   LVLT 8.90 Peers 8.03

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

LVLT is trading at a valuation on par with its peers.

 

Premium. 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.

LVLT is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
LVLT 32.85 Peers 15.88   LVLT NM Peers 0.75

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

LVLT 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.

LVLT's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LVLT 1.90 Peers 3.46   LVLT -81.49 Peers 31.91

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

LVLT is trading at a significant discount to its peers.

 

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

However, LVLT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LVLT 2.58 Peers 11.72   LVLT -0.71 Peers 2.53

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.

LVLT 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.

LVLT significantly trails its peers on the basis of sales growth

 

 

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