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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 49.89 (1.26% today). The market cap for Level 3 Communications, Inc. is 17532.24, and is in the sector Technology, and Diversified Communication Services industry. The target price for Level 3 Communications, Inc. is 60.67. Currently Level 3 Communications, Inc. is trading with a P/E of 5.03, and a forward P/E of 23.56. Average volume for Level 3 Communications, Inc. is 2093.73 and so far today it is 1325170.

Performance in the last year for Level 3 Communications, Inc. has been 0.39%. For EPS growth, Level 3 Communications, Inc. has seen a growth of 688.10%, and is looking to grow in the next year to 26.34%. 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 -5.05%, with the 200-day simple moving average coming to -2.72%.

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 -9.36%. With Level 3 Communications, Inc. trading at 49.89, 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 5.03. The PEG is 0.5, P/S is 2.13 and the P/B is at 1.68. The P/cash is 13.58, with P/free cash flow at 18.45.

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 88.70%. Outstanding shares are at 355.84. While shares float is 355.31. The float short is currently 1.30%, and short ratio is 2.21.

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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