Level 3 Communications Inc

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LVLT : NYSE : Technology
$56.24 | %
Today's Range: 56.16 - 56.54
Avg. Daily Volume: 4434100.0
12/09/16 - 4:02 PM ET

Financial Analysis

LEVEL 3 COMMUNICATIONS INC's gross profit margin for the third 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, representing an increase to the bottom line. 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.

At the same time, stockholders' equity ("net worth") has greatly increased by 58.17% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)2033.02062.0
EBITDA ($mil)673.0641.0
EBIT ($mil)354.0345.0
Net Income ($mil)143.01.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1577.0698.0
Total Assets ($mil)24746.020883.0
Total Debt ($mil)10882.011013.0
Equity ($mil)10724.06780.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin66.865.76
EBITDA Margin33.131.08
Operating Margin17.4116.73
Sales Turnover0.330.39
Return on Assets15.150.84
Return on Equity34.962.59
Debt Q3 FY16 Q3 FY15
Current Ratio1.631.13
Interest Expense139.0145.0
Interest Coverage2.552.38

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)359.69355.93
Div / share0.00.0
Book value / share29.8119.05
Institutional Own % n/a n/a
Avg Daily Volume4389138.02305763.0


BUY. LEVEL 3 COMMUNICATIONS INC's P/E ratio indicates a significant discount compared to an average of 21.35 for the Diversified Telecommunication Services industry and a significant discount compared to the S&P 500 average of 25.37. To use another comparison, its price-to-book ratio of 1.88 indicates a discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 4.07. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. 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.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
LVLT 5.38 Peers 21.35   LVLT 8.60 Peers 7.39

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

LVLT is trading at a significant 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.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
LVLT 27.78 Peers 20.34   LVLT NM Peers 1.90

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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
LVLT 1.88 Peers 4.07   LVLT 1903.84 Peers 94.39

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.


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

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

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
LVLT 2.46 Peers 1.75   LVLT 1.27 Peers 9.56

Premium. 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 premium to its industry.


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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