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CenturyLink (CTL) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

CenturyLink (CTL) closed at $11.99 in the latest trading session, marking a -0.5% move from the prior day. This change lagged the S&P 500's daily gain of 0.67%. At the same time, the Dow added 0.82%, and the tech-heavy Nasdaq gained 0.78%.

Heading into today, shares of the communications company had lost 8.64% over the past month, lagging the Computer and Technology sector's gain of 2.27% and the S&P 500's gain of 1.25% in that time.

CTL will be looking to display strength as it nears its next earnings release. In that report, analysts expect CTL to post earnings of $0.29 per share. This would mark year-over-year growth of 16%. Our most recent consensus estimate is calling for quarterly revenue of $5.75 billion, down 3.29% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.24 per share and revenue of $22.77 billion. These totals would mark changes of +4.2% and -3.43%, respectively, from last year.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CTL is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, CTL currently has a Forward P/E ratio of 9.68. This represents a discount compared to its industry's average Forward P/E of 30.83.

Meanwhile, CTL's PEG ratio is currently 0.76. 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. Wireless National stocks are, on average, holding a PEG ratio of 2.9 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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