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CenturyLink (CTL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

CenturyLink (CTL) closed the most recent trading day at $12.73, moving -1.47% from the previous trading session. This change lagged the S&P 500's daily loss of 0.84%. Elsewhere, the Dow lost 0.53%, while the tech-heavy Nasdaq lost 1.47%.

Heading into today, shares of the communications company had gained 11.38% over the past month, outpacing the Computer and Technology sector's gain of 5.21% and the S&P 500's gain of 5.2% in that time.

CTL will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.32, up 6.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.55 billion, down 4.56% from the prior-year quarter.

CTL's full-year Zacks Consensus Estimates are calling for earnings of $1.32 per share and revenue of $22.30 billion. These results would represent year-over-year changes of +10.92% and -5.43%, respectively.

Any recent changes to analyst estimates for CTL should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CTL is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, CTL is holding a Forward P/E ratio of 9.76. For comparison, its industry has an average Forward P/E of 16.14, which means CTL is trading at a discount to the group.

Investors should also note that CTL has a PEG ratio of 0.91 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless National industry currently had an average PEG ratio of 2.36 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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