Time Warner’s valuation metrics
Valuation metrics include PE (price-to-earnings) multiples and EV (enterprise value) multiples. Time Warner (TWX) has a forward EV-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio of 10.5x and a forward PE multiple of 15.2x.
In contrast, Time Warner’s peers The Walt Disney Company (DIS), Twenty-First Century Fox (FOXA), and Comcast (CMCSA) have forward PE multiples of 15.5x, 13.2x, and 17.8x, respectively. It indicates that Time Warner is undervalued among its peers on a PE multiple basis.
Time Warner had free cash flow of $1.4 billion in fiscal 1Q17 and an EV of $98.8 billion as of June 27, 2017. Time Warner had an EV-to-FCFF (free cash flow to the firm) multiple for the trailing one year of 20.1x on June 27.
Price movement for Time Warner
Time Warner stock closed at $99.31 on June 27. It has risen 52.4% in the past year with a trailing one-year return of 43.5%. In contrast, TWX’s peers The Walt Disney Company, Twenty-First Century Fox, and Comcast stocks have risen 0.70%, 4.6%, and 25.0%, respectively.