Is There Opportunity in Frontier Communications Parent Amid 70% DCF Upside Estimate for 2025?

If you are weighing what to do with Frontier Communications Parent stock right now, you are not alone. Plenty of investors are looking at the latest trends and wondering whether there is a reason to feel optimistic or take a more cautious approach. The case for Frontier starts with its own recent journey. In the past year, the stock has climbed 4.3%, and year-to-date it is up 7.0%. That is not a meteoric rise, but it does hint at a market that is recalibrating its risk outlook and may be starting to see new potential in the company’s long-term business trajectory. For perspective, the remarkable three-year return of 74.8% underscores just how much sentiment around Frontier has shifted as market conditions have evolved and the company has demonstrated resilience through industry changes.

Despite this solid performance, Frontier’s valuation score is currently a 2 out of 6, meaning it is considered undervalued in just two of the main assessment checks. That suggests some interesting possibilities but also signals that, by at least a few measures, significant upside could be harder to come by from the current price. Still, the stock’s recent movements, especially the relatively flat returns over the last month (-0.4%) and a mild gain over 30 days (0.9%), invite a deeper look.

So, is this a value play flying under the radar, or is the market already pricing in most of what you might hope for? Let us dig into the major ways Frontier is valued, and further down, I will share a perspective on stock valuation you will not want to miss.

Frontier Communications Parent scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Frontier Communications Parent Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a popular valuation method that estimates a company’s intrinsic value by projecting its expected future cash flows and discounting those cash flows back to today’s dollars. This helps investors gauge what a business might be worth given how much cash it can generate over time, taking into account both near-term analyst estimates and long-range projections.

For Frontier Communications Parent, the most recent twelve months saw a Free Cash Flow (FCF) of -$1.26 billion, signaling current operational losses but also the potential for major turnaround. Analysts forecast significant improvement, with the company expected to generate positive FCF of $971 million by 2029. Looking further ahead using broader projection methods, FCF is estimated to climb to almost $2 billion by 2035, though values beyond analyst coverage carry more uncertainty.

The DCF model suggests a fair value of $126.50 per share. When compared to the current market price, this implies the stock is undervalued by 70.5%. In plain terms, the market is currently recognizing only about 30% of what DCF suggests the business could be worth if those cash flow improvements materialize.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Frontier Communications Parent.

Our Discounted Cash Flow (DCF) analysis suggests Frontier Communications Parent is undervalued by 70.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Frontier Communications Parent Price vs Sales

For many companies that are yet to achieve steady profitability, or are in the midst of major turnarounds, the Price-to-Sales (P/S) ratio is often the most relevant valuation metric. The P/S ratio offers a way to value revenue-generating businesses even when earnings are negative, as is currently the case for Frontier. It is particularly helpful for telecom firms, where revenues tend to be more consistent and informative than profits during restructuring phases.

Growth prospects and perceived risks play a major role in what makes a “normal” or fair P/S ratio. Companies with stronger revenue growth and more predictable income can command higher P/S multiples, while added uncertainty or industry headwinds typically lead to lower valuations.

Frontier’s current P/S ratio stands at 1.54x, which is a bit higher than both the telecom industry average of 1.32x and the peer group average of 1.31x. However, Simply Wall St’s proprietary Fair Ratio, calculated at 1.20x, adds important context. This figure is tailored to Frontier’s forecasted revenue expansion, sector dynamics, profit margins, market cap and specific risks. It gives investors a more nuanced benchmark instead of relying on broad peer and industry averages alone.

Comparing Frontier’s real-world multiple of 1.54x to the Fair Ratio of 1.20x, the stock appears to be trading somewhat above what is justified when all major factors are weighed together. In other words, the market may already be pricing in some optimism about future progress, and there is a modest overvaluation at current levels.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Frontier Communications Parent Narrative

Earlier we mentioned there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative is simply your personal investment story for a company, where you connect your perspective and expectations for its business to numbers like future revenue and profit margins, then arrive at your own fair value estimate. This approach links what matters to you, such as confidence in Frontier’s technological upgrades or concerns about competition, directly to a tailored financial forecast and valuation.

Narratives are easy to use and available to everyone on Simply Wall St’s Community page, where millions of investors actively share their views. By comparing each Narrative’s Fair Value to the current stock price, you can make clearer decisions on buying or selling based on your outlook. Because Narratives update instantly whenever fresh news or company results are released, your analysis always stays relevant.

For example, some investors see immense upside if Frontier delivers on fiber expansion, setting a high fair value. Others, more cautious about debt or execution risk, set a lower one. Narratives help you see where your conviction fits within the broader community and empower smarter, more dynamic investment decisions.

Do you think there's more to the story for Frontier Communications Parent? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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