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
Interest Expense132.0140.0
Interest Coverage2.842.67

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


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.

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.

1 2 3 4 5
premium   discount
  Price to
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.

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.

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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