Level 3 Communications Inc

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LVLT : NYSE : Technology
$52.705 up 0.25 | 0.49%
Today's Range: 52.33 - 53.0
Avg. Daily Volume: 2136300.0
09/19/17 - 3:15 PM ET

Financial Analysis


LEVEL 3 COMMUNICATIONS INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. LEVEL 3 COMMUNICATIONS INC has strong liquidity. Currently, the Quick Ratio is 1.70 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 7.76% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)2061.02056.0
EBITDA ($mil)705.0684.0
EBIT ($mil)375.0374.0
Net Income ($mil)154.0156.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)2188.01299.0
Total Assets ($mil)25287.024534.0
Total Debt ($mil)10890.010878.0
Equity ($mil)11315.010500.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin67.2567.12
EBITDA Margin34.233.26
Operating Margin18.218.19
Sales Turnover0.320.34
Return on Assets2.5314.7
Return on Equity5.6734.36
Debt Q2 FY17 Q2 FY16
Current Ratio1.791.52
Debt/Capital0.490.51
Interest Expense132.0140.0
Interest Coverage2.842.67


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)361.48358.04
Div / share0.00.0
EPS0.420.43
Book value / share31.329.33
Institutional Own % n/a n/a
Avg Daily Volume2227069.02369462.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 34.08 for the Diversified Telecommunication Services industry and a premium compared to the S&P 500 average of 24.88. To use another comparison, its price-to-book ratio of 1.69 indicates a discount versus the S&P 500 average of 3.10 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. Upon assessment of these and other key valuation criteria, LEVEL 3 COMMUNICATIONS INC proves to trade at a discount 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
LVLT 30.07 Peers 34.08   LVLT 8.32 Peers 6.94

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

LVLT is trading at a discount to 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 29.90 Peers 15.35   LVLT NM Peers 0.66

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 1.69 Peers 3.46   LVLT -82.46 Peers 55.53

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 2.34 Peers 11.15   LVLT -0.59 Peers 0.91

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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