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CenturyLink’s Current Valuation Compared to Its Peers

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Jun. 24 2019, Updated 9:03 a.m. ET

Forward PE ratio

Valuation multiples are commonly used in the telecom sector to compare different business entities. On June 20, CenturyLink (CTL) was trading at a 12-month forward PE ratio of 8.60x. Charter Communications (CHTR) and Comcast’s (CMCSA) 12-month forward PE ratios were 38.15x and 13.65x, respectively. A company’s PE ratio represents the amount investors are willing to pay per dollar of the EPS.

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Forward EV-to-EBITDA multiple

On June 20, CenturyLink had a trailing 12-month EV-to-EBITDA multiple of 4.92x—compared to its peers. Charter Communication, Comcast, and Frontier Communications (FTR) had trailing 12-month EV-to-EBITDA multiples of 10.64x, 9.83x, and 4.94x, respectively. On June 20, CenturyLink was trading at a 12-month forward EV-to-EBITDA multiple of 5.27x. Charter Communications, Comcast, and Frontier Communications’ 12-month forward EV-to-EBITDA multiples were 9.76x, 8.52x, and 5.02x, respectively.

CenturyLink’s scale

On June 20, CenturyLink’s market capitalization was $12.4 billion. Comcast had a market capitalization of $197.7 billion. Charter Communications’ market capitalization was $88.8 billion, while Frontier Communications’ market capitalization was $0.15 billion.

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