Liberty Latin America Ltd. (NASDAQ:LILA) Shares Could Be 34% Above Their Intrinsic Value Estimate
In this article we are going to estimate the intrinsic value of Liberty Latin America Ltd. ( NASDAQ:LILA ) by taking...
Has the U.S. Telecom Services and Carriers Industry valuation changed over the past few years?
|Tue, 30 Nov 2021||US$457.1b||US$360.0b||US$38.7b||16.4x|
|Thu, 28 Oct 2021||US$468.4b||US$363.7b||US$37.0b||15.1x|
|Sat, 25 Sep 2021||US$486.2b||US$361.3b||US$31.5b||11.3x|
|Mon, 23 Aug 2021||US$487.3b||US$361.0b||US$31.6b||11.5x|
|Sat, 10 Jul 2021||US$503.0b||US$361.0b||US$31.6b||11.6x|
|Fri, 02 Apr 2021||US$512.1b||US$347.3b||US$13.4b||13.4x|
|Mon, 04 Jan 2021||US$495.0b||US$344.1b||US$8.6b||10.8x|
|Thu, 08 Oct 2020||US$492.5b||US$348.9b||US$27.2b||10.6x|
|Wed, 01 Jul 2020||US$486.5b||US$352.4b||US$30.6b||13.4x|
|Sat, 04 Apr 2020||US$468.6b||US$358.4b||US$32.8b||12.1x|
|Tue, 07 Jan 2020||US$587.2b||US$362.2b||US$25.7b||20.5x|
|Mon, 30 Sep 2019||US$575.3b||US$363.2b||US$23.1b||15.5x|
|Thu, 04 Jul 2019||US$531.7b||US$364.8b||US$22.8b||14.9x|
|Sun, 07 Apr 2019||US$522.6b||US$359.6b||US$25.4b||15.6x|
|Wed, 09 Jan 2019||US$488.9b||US$352.3b||US$31.0b||15.1x|
Current Industry PE: Investors are relatively neutral on the industry at the moment, considering it's trading close to its 3-year average PE ratio of 13.9x. It appears they believe that earnings will grow in-line with historical growth rates.
Past Earnings Growth: The earnings for companies in the Telecom industry have declined 15% per year over the last three years, while revenues have remained mostly flat. This means that although sales have remained flat, either the cost of doing business or the level of investment back into businesses has increased, which has decreased profits.
Which industries have driven the changes within the U.S. Telecom Services and Carriers industry?
|Integrated Telecom Services||-1.07%|
Industry PE: Investors are most optimistic about the Alternative Carriers industry even though it's trading below its 3-year average PE ratio of 55.9x. However analysts are expecting annual earnings decline of 12%, which is lower than the prior year's growth of 146% per year. So the market might believe that analysts are underestimating future growth or they expect the Alternative Carriers industry's earnings to deteriorate the least compared to other industries. Meanwhile, investors are most pessimistic about the Integrated Telecom Services industry, which is trading close to its 3-year average of 13.4x.
Forecasted Growth: Analysts are most optimistic on the Integrated Telecom Services industry, expecting annual earnings growth of 2.4% over the next 5 years. Meanwhile, the Alternative Carriers industry is expected to see its earnings decline by 12% per year over the next few years.
Which companies have driven the market over the last 7 days?
Liberty Latin America
Cogent Communications Holdings
Verizon's historical financial performance has had bond-like features. Investors are attracted by this stability and every so slightly increasing dividend. But in general, the telecom space is not where an investor searching for growth will find it. There is a lot of hype and hope around 5G and the revenue growth this technology shift in the mobile space will bring. But as a base case, I think investors will continue to be disappointed in Verizon's share performance over the next coming years.
I delve more into some of the bearish arguments that have been put forward against AT&T. I find some of these to be straightforward-enough to brush aside - not because they're not legitimate grievances, but either because they're backward-looking, or are probably more than priced-in. These concerns include the upcoming dividend cut, past performance and doubts about management, doubts about NewCo's competitiveness, and the One America News controversy. One that's worth paying closer attention is potential structural weakness in the face of competition. The key question for investors, again, though, is whether this is priced-in, already. The recent bounce in Discovery stock has implied further erosion in the market cap for AT&T RemainCo.
EchoStar announces its sixth consecutive earnings beat in the third quarter. The Hughes segment continues to drive sales forward with adjusted EBITDA increasing by 9% over a rolling quarter basis. The long-term technicals remain bullish. Balance sheet trends confirm the upward curve.
Mobile Top Up, by itself, is worth more than 150% of IDT's entire current stock price on a 2Y basis. Because IDT's selling point is its three "gem" segments (National Retail Solutions, net2phone, and money transfer), Mobile Top Up has been overshadowed. IDT management is looking to separate Mobile Top Up as an individual segment following the net2phone spinoff, providing a clear catalyst for multiple rerating.
Frontier Communications Parent