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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 56.65 (0.50% today). The market cap for Level 3 Communications, Inc. is 20085.19, and is in the sector Technology, and Diversified Communication Services industry. The target price for Level 3 Communications, Inc. is 62.46. Currently Level 3 Communications, Inc. is trading with a P/E of 6.04, and a forward P/E of 25.75. Average volume for Level 3 Communications, Inc. is 1921.49 and so far today it is 1109957.

Performance in the last year for Level 3 Communications, Inc. has been 7.49%. For EPS growth, Level 3 Communications, Inc. has seen a growth of 688.10%, and is looking to grow in the next year to 27.19%. 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 -0.10%, with EPS growth quarter over quarter at -1.00%. The 20-day simple moving average is 7.58%, with the 200-day simple moving average coming to 11.17%.

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 3.70%. With Level 3 Communications, Inc. trading at 56.65, the dividend yield is *TBA, and the EPS is 9.34.

So could Level 3 Communications, Inc., be undervalued? Well as said before P/E is 6.04. The PEG is 0.6, P/S is 2.44 and the P/B is at 1.94. The P/cash is 20.01, with P/free cash flow at 25.49.

Level 3 Communications, Inc. ability to deal with debt shows that the current ratio is 1.3, and the quick ratio is 1.3. This is with long term debt/equity at 1.05, and total debt/equity at 1.13.

In terms of margins, Level 3 Communications, Inc. has a gross margin of 48.70%, an operating margin of 12.00% and a profit margin of 41.80%.Payout ratio for Level 3 Communications, Inc. is 0.00%. Return on assets come to 15.10% with return on investment coming to 19.50%.

Insider ownership for Level 3 Communications, Inc., is at 0.60% and institutional ownership comes to 88.40%. Outstanding shares are at 356.31. While shares float is 354.38. The float short is currently 1.25%, and short ratio is 2.3.

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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Stephen Butters

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