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What’s Frontier Communications’ Valuation after Its Q1 Results?

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Frontier’s scale

As of May 6, Frontier Communications (FTR) had a market capitalization of $0.22 billion. CenturyLink (CTL), Comcast (CMCSA), and Charter Communications (CHTR) have market capitalizations of $12.56 billion, $196.53 billion, and $84.65 billion, respectively.

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Short interest ratio

As of May 6, Frontier stock’s short interest as a percentage of float (or short interest ratio) was ~54.35%. A stock’s short interest ratio of more than 40% suggests that investors and traders foresee a fall in the stock’s price.

Frontier’s EV-to-EBITDA valuation

On May 6, Frontier had a trailing-12-month EV-to-EBITDA multiple of ~4.96x compared to its peers. CenturyLink, Comcast, and Charter had trailing-12-month EV-to-EBITDA multiples of ~5.04x, ~9.80x, and ~10.38x, respectively. Frontier anticipates its EV-to-EBITDA in fiscal 2019 to be ~4.92x, while in fiscal 2020, the multiple is anticipated to be ~5.16x.

Bollinger Band

In the May 6 trading session, Frontier stock closed at $2.12, which is near its lower Bollinger Band level of $2.04. The level suggests that Frontier stock is oversold.

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