United States Cellular Corp

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USM : NYSE : Technology
$37.39 -0.26 | -0.69%
Today's Range: 37.29 - 37.94
Avg. Daily Volume: 76,600
08/30/16 - 4:02 PM ET

Financial Analysis


US CELLULAR 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. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. US CELLULAR CORP has strong liquidity. Currently, the Quick Ratio is 1.81 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.55% 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 FY16 Q2 FY15
Net Sales ($mil)980.0975.67
EBITDA ($mil)168.0162.75
EBIT ($mil)14.012.17
Net Income ($mil)27.019.35


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)621.0362.28
Total Assets ($mil)7091.06596.62
Total Debt ($mil)1634.01152.06
Equity ($mil)3611.03487.03


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin53.6753.88
EBITDA Margin17.1416.68
Operating Margin1.431.25
Sales Turnover0.560.6
Return on Assets1.382.06
Return on Equity2.713.89
Debt Q2 FY16 Q2 FY15
Current Ratio2.21.48
Debt/Capital0.310.25
Interest Expense28.020.15
Interest Coverage0.50.6


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)84.8184.35
Div / share0.00.0
EPS0.320.23
Book value / share42.5841.34
Institutional Own % n/a n/a
Avg Daily Volume77205.088418.0

Valuation


HOLD. The current P/E ratio indicates a significant premium compared to an average of 19.41 for the Wireless Telecommunication Services industry and a premium compared to the S&P 500 average of 25.13. Conducting a second comparison, its price-to-book ratio of 0.89 indicates a significant discount versus the S&P 500 average of 2.82 and a discount versus the industry average of 1.93. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
USM 33.04 Peers 19.41   USM 8.20 Peers 6.80

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

USM is trading at a significant premium 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.

USM 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
USM 54.68 Peers 19.26   USM NM Peers 1.11

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

USM 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.

USM'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
USM 0.89 Peers 1.93   USM -28.58 Peers -0.11

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.

USM 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, USM 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
USM 0.81 Peers 1.88   USM 1.11 Peers 0.45

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.

USM is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

USM has a sales growth rate that significantly exceeds its peers.

 

 

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