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Is this Large Market Cap Stock target price reasonable for Level 3 Communications, Inc. (NYSE:LVLT)?

The company in question is, Level 3 Communications, Inc. (NYSE:LVLT) currently with a stock price of 46.09 (-0.13% today). The market cap for Level 3 Communications, Inc. is 16496.72, and is in the sector Technology, and Diversified Communication Services industry. The target price for Level 3 Communications, Inc. is 60.85. Currently Level 3 Communications, Inc. is trading with a P/E of 4.71, and a forward P/E of 22.32. Average volume for Level 3 Communications, Inc. is 2766.69 and so far today it is 3435200.

Performance in the last year for Level 3 Communications, Inc. has been -2.72%. For EPS growth, Level 3 Communications, Inc. has seen a growth of 688.10%, and is looking to grow in the next year to 24.70%. More long term stats show that EPS growth has been 30.00% over the last five years and could be 10.00% for the next five years. Level 3 Communications, Inc. has seen sales growth quarter over quarter at -0.20%, with EPS growth quarter over quarter at *TBA. The 20-day simple moving average is -4.50%, with the 200-day simple moving average coming to -8.79%.

Since the IPO date for Level 3 Communications, Inc. on the 3/31/1998, Level 3 Communications, Inc. has seen performance year to date to be -15.21%. With Level 3 Communications, Inc. trading at 46.09, the dividend yield is *TBA, and the EPS is 9.79.

So could Level 3 Communications, Inc., be undervalued? Well as said before P/E is 4.71. The PEG is 0.47, P/S is 2.01 and the P/B is at 1.57. The P/cash is 12.78, with P/free cash flow at 17.36.

Level 3 Communications, Inc. ability to deal with debt shows that the current ratio is 1.5, and the quick ratio is 1.5. This is with long term debt/equity at 1.04, and total debt/equity at 1.04.

In terms of margins, Level 3 Communications, Inc. has a gross margin of 49.20%, an operating margin of 13.80% and a profit margin of 43.70%.Payout ratio for Level 3 Communications, Inc. is 0.00%. Return on assets come to 15.20% with return on investment coming to 19.50%.

Insider ownership for Level 3 Communications, Inc., is at 0.60% and institutional ownership comes to 87.50%. Outstanding shares are at 357.92. While shares float is 356.86. The float short is currently 1.55%, and short ratio is 2.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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