Frontier Communications’ Valuation before Its Q1 Results



Frontier’s scale

As of April 10, Frontier Communications (FTR) had a market capitalization of $0.26 billion. CenturyLink (CTL), Comcast (CMCSA), and Charter Communications (CHTR) have market capitalizations of $13.55 billion, $185.93 billion, and $79.72 billion, respectively.

Short interest ratio

As of April 10, Frontier Communications’ short interest as a percentage of float or short interest ratio was ~52.96%. When a stock’s short interest ratio is greater than 40%, it suggests that investors and traders expect the stock’s price to fall.

Frontier’s EV-to-EBITDA multiple

On April 10, Frontier Communications had a trailing 12-month EV-to-EBITDA multiple of ~4.97x—compared to its peers. CenturyLink, Comcast, and Charter had trailing-12-month EV-to-EBITDA multiples of ~5.14x, ~9.93x, and ~10.14x, respectively.

Frontier Communications expects its EV-to-EBITDA multiple in fiscal 2019 to be ~4.99x. In fiscal 2020, the multiple is expected to be ~5.21x.

Bollinger Band

In the trading session on April 10, Frontier Communications stock closed at $2.48, which is near its Bollinger Band mid-range level of $2.32. The level suggests that Frontier Communications stock isn’t oversold or overbought.

More From Market Realist