Intrinsic value of Consolidated Communications Holdings - CNSL

Previous Close

$13.22

  Intrinsic Value

$98.56

stock screener

  Rating & Target

str. buy

+646%

Previous close

$13.22

 
Intrinsic value

$98.56

 
Up/down potential

+646%

 
Rating

str. buy

We calculate the intrinsic value of CNSL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,695
  2,619
  3,917
  5,684
  8,019
  11,024
  14,797
  19,430
  25,001
  31,579
  39,213
  47,942
  57,786
  68,754
  80,843
  94,040
  108,326
  123,678
  140,072
  157,482
  175,887
  195,266
  215,606
  236,896
  259,134
  282,322
  306,471
  331,596
  357,721
  384,874
Variable operating expenses, $m
  1,415
  2,112
  3,092
  4,426
  6,189
  8,458
  11,308
  14,805
  19,012
  23,979
  29,609
  36,200
  43,633
  51,915
  61,043
  71,007
  81,795
  93,387
  105,766
  118,912
  132,809
  147,442
  162,800
  178,875
  195,667
  213,176
  231,410
  250,381
  270,108
  290,610
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,415
  2,112
  3,092
  4,426
  6,189
  8,458
  11,308
  14,805
  19,012
  23,979
  29,609
  36,200
  43,633
  51,915
  61,043
  71,007
  81,795
  93,387
  105,766
  118,912
  132,809
  147,442
  162,800
  178,875
  195,667
  213,176
  231,410
  250,381
  270,108
  290,610
Operating income, $m
  281
  507
  825
  1,258
  1,829
  2,565
  3,490
  4,624
  5,989
  7,600
  9,604
  11,742
  14,153
  16,839
  19,800
  23,032
  26,531
  30,291
  34,306
  38,571
  43,078
  47,825
  52,806
  58,021
  63,467
  69,146
  75,061
  81,215
  87,613
  94,263
EBITDA, $m
  785
  1,213
  1,813
  2,631
  3,712
  5,103
  6,850
  8,994
  11,574
  14,618
  18,153
  22,193
  26,750
  31,828
  37,424
  43,533
  50,146
  57,253
  64,842
  72,902
  81,422
  90,393
  99,808
  109,664
  119,958
  130,693
  141,872
  153,503
  165,596
  178,166
Interest expense (income), $m
  70
  164
  296
  488
  758
  1,125
  1,610
  2,234
  3,018
  3,981
  5,139
  6,505
  8,092
  9,906
  11,951
  14,230
  16,742
  19,484
  22,453
  25,643
  29,049
  32,667
  36,491
  40,518
  44,744
  49,168
  53,789
  58,607
  63,625
  68,846
  74,274
Earnings before tax, $m
  117
  211
  337
  500
  705
  956
  1,255
  1,606
  2,008
  2,461
  3,099
  3,650
  4,247
  4,888
  5,570
  6,290
  7,047
  7,839
  8,664
  9,521
  10,411
  11,334
  12,288
  13,276
  14,299
  15,357
  16,454
  17,589
  18,767
  19,989
Tax expense, $m
  32
  57
  91
  135
  190
  258
  339
  434
  542
  664
  837
  986
  1,147
  1,320
  1,504
  1,698
  1,903
  2,116
  2,339
  2,571
  2,811
  3,060
  3,318
  3,585
  3,861
  4,147
  4,442
  4,749
  5,067
  5,397
Net income, $m
  85
  154
  246
  365
  514
  698
  916
  1,172
  1,466
  1,797
  2,262
  2,665
  3,101
  3,568
  4,066
  4,592
  5,144
  5,722
  6,325
  6,951
  7,600
  8,273
  8,970
  9,692
  10,438
  11,211
  12,011
  12,840
  13,700
  14,592

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,948
  9,190
  13,744
  19,942
  28,136
  38,680
  51,920
  68,174
  87,723
  110,802
  137,591
  168,218
  202,759
  241,243
  283,659
  329,964
  380,090
  433,959
  491,481
  552,570
  617,147
  685,145
  756,511
  831,214
  909,241
  990,604
  1,075,337
  1,163,495
  1,255,160
  1,350,434
Adjusted assets (=assets-cash), $m
  5,948
  9,190
  13,744
  19,942
  28,136
  38,680
  51,920
  68,174
  87,723
  110,802
  137,591
  168,218
  202,759
  241,243
  283,659
  329,964
  380,090
  433,959
  491,481
  552,570
  617,147
  685,145
  756,511
  831,214
  909,241
  990,604
  1,075,337
  1,163,495
  1,255,160
  1,350,434
Revenue / Adjusted assets
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
  0.285
Average production assets, $m
  3,326
  5,139
  7,685
  11,151
  15,733
  21,629
  29,032
  38,121
  49,052
  61,957
  76,937
  94,062
  113,377
  134,896
  158,614
  184,506
  212,535
  242,657
  274,821
  308,981
  345,090
  383,113
  423,018
  464,790
  508,420
  553,916
  601,296
  650,592
  701,848
  755,122
Working capital, $m
  -46
  -71
  -106
  -153
  -217
  -298
  -400
  -525
  -675
  -853
  -1,059
  -1,294
  -1,560
  -1,856
  -2,183
  -2,539
  -2,925
  -3,339
  -3,782
  -4,252
  -4,749
  -5,272
  -5,821
  -6,396
  -6,997
  -7,623
  -8,275
  -8,953
  -9,658
  -10,392
Total debt, $m
  4,228
  6,971
  10,824
  16,067
  22,999
  31,919
  43,120
  56,871
  73,410
  92,934
  115,598
  141,508
  170,730
  203,288
  239,172
  278,345
  320,753
  366,325
  414,989
  466,670
  521,303
  578,829
  639,205
  702,403
  768,414
  837,247
  908,931
  983,513
  1,061,061
  1,141,663
Total liabilities, $m
  5,032
  7,775
  11,628
  16,871
  23,803
  32,723
  43,924
  57,675
  74,214
  93,738
  116,402
  142,312
  171,534
  204,092
  239,976
  279,149
  321,557
  367,129
  415,793
  467,474
  522,107
  579,633
  640,009
  703,207
  769,218
  838,051
  909,735
  984,317
  1,061,865
  1,142,467
Total equity, $m
  916
  1,415
  2,117
  3,071
  4,333
  5,957
  7,996
  10,499
  13,509
  17,063
  21,189
  25,906
  31,225
  37,151
  43,684
  50,814
  58,534
  66,830
  75,688
  85,096
  95,041
  105,512
  116,503
  128,007
  140,023
  152,553
  165,602
  179,178
  193,295
  207,967
Total liabilities and equity, $m
  5,948
  9,190
  13,745
  19,942
  28,136
  38,680
  51,920
  68,174
  87,723
  110,801
  137,591
  168,218
  202,759
  241,243
  283,660
  329,963
  380,091
  433,959
  491,481
  552,570
  617,148
  685,145
  756,512
  831,214
  909,241
  990,604
  1,075,337
  1,163,495
  1,255,160
  1,350,434
Debt-to-equity ratio
  4.620
  4.930
  5.110
  5.230
  5.310
  5.360
  5.390
  5.420
  5.430
  5.450
  5.460
  5.460
  5.470
  5.470
  5.480
  5.480
  5.480
  5.480
  5.480
  5.480
  5.490
  5.490
  5.490
  5.490
  5.490
  5.490
  5.490
  5.490
  5.490
  5.490
Adjusted equity ratio
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  85
  154
  246
  365
  514
  698
  916
  1,172
  1,466
  1,797
  2,262
  2,665
  3,101
  3,568
  4,066
  4,592
  5,144
  5,722
  6,325
  6,951
  7,600
  8,273
  8,970
  9,692
  10,438
  11,211
  12,011
  12,840
  13,700
  14,592
Depreciation, amort., depletion, $m
  504
  705
  988
  1,373
  1,883
  2,538
  3,360
  4,370
  5,585
  7,019
  8,549
  10,451
  12,597
  14,988
  17,624
  20,501
  23,615
  26,962
  30,536
  34,331
  38,343
  42,568
  47,002
  51,643
  56,491
  61,546
  66,811
  72,288
  77,983
  83,902
Funds from operations, $m
  589
  860
  1,234
  1,738
  2,397
  3,235
  4,277
  5,542
  7,050
  8,815
  10,811
  13,116
  15,698
  18,557
  21,690
  25,092
  28,759
  32,684
  36,860
  41,282
  45,944
  50,842
  55,972
  61,335
  66,929
  72,757
  78,822
  85,128
  91,683
  98,494
Change in working capital, $m
  -17
  -25
  -35
  -48
  -63
  -81
  -102
  -125
  -150
  -178
  -206
  -236
  -266
  -296
  -326
  -356
  -386
  -415
  -443
  -470
  -497
  -523
  -549
  -575
  -600
  -626
  -652
  -678
  -705
  -733
Cash from operations, $m
  607
  884
  1,269
  1,786
  2,460
  3,316
  4,379
  5,667
  7,201
  8,993
  11,017
  13,352
  15,964
  18,853
  22,016
  25,449
  29,145
  33,099
  37,303
  41,752
  46,441
  51,365
  56,522
  61,910
  67,530
  73,383
  79,474
  85,807
  92,388
  99,228
Maintenance CAPEX, $m
  -231
  -370
  -571
  -854
  -1,239
  -1,748
  -2,403
  -3,226
  -4,236
  -5,450
  -6,884
  -8,549
  -10,451
  -12,597
  -14,988
  -17,624
  -20,501
  -23,615
  -26,962
  -30,536
  -34,331
  -38,343
  -42,568
  -47,002
  -51,643
  -56,491
  -61,546
  -66,811
  -72,288
  -77,983
New CAPEX, $m
  -1,246
  -1,813
  -2,546
  -3,466
  -4,581
  -5,896
  -7,403
  -9,089
  -10,931
  -12,905
  -14,980
  -17,126
  -19,314
  -21,519
  -23,718
  -25,892
  -28,029
  -30,121
  -32,165
  -34,159
  -36,110
  -38,022
  -39,906
  -41,771
  -43,631
  -45,496
  -47,380
  -49,296
  -51,256
  -53,274
Cash from investing activities, $m
  -1,477
  -2,183
  -3,117
  -4,320
  -5,820
  -7,644
  -9,806
  -12,315
  -15,167
  -18,355
  -21,864
  -25,675
  -29,765
  -34,116
  -38,706
  -43,516
  -48,530
  -53,736
  -59,127
  -64,695
  -70,441
  -76,365
  -82,474
  -88,773
  -95,274
  -101,987
  -108,926
  -116,107
  -123,544
  -131,257
Free cash flow, $m
  -871
  -1,298
  -1,848
  -2,534
  -3,360
  -4,328
  -5,428
  -6,647
  -7,966
  -9,362
  -10,847
  -12,323
  -13,802
  -15,264
  -16,690
  -18,067
  -19,385
  -20,638
  -21,824
  -22,943
  -24,000
  -25,001
  -25,952
  -26,864
  -27,744
  -28,604
  -29,452
  -30,300
  -31,156
  -32,030
Issuance/(repayment) of debt, $m
  1,887
  2,743
  3,853
  5,243
  6,932
  8,921
  11,201
  13,751
  16,539
  19,524
  22,663
  25,911
  29,222
  32,558
  35,884
  39,174
  42,407
  45,572
  48,664
  51,682
  54,632
  57,526
  60,376
  63,198
  66,011
  68,833
  71,684
  74,582
  77,549
  80,602
Issuance/(repurchase) of shares, $m
  257
  345
  455
  590
  747
  926
  1,123
  1,331
  1,545
  1,758
  1,863
  2,052
  2,219
  2,358
  2,466
  2,539
  2,575
  2,573
  2,534
  2,457
  2,345
  2,198
  2,020
  1,812
  1,578
  1,319
  1,038
  736
  416
  80
Cash from financing (excl. dividends), $m  
  2,144
  3,088
  4,308
  5,833
  7,679
  9,847
  12,324
  15,082
  18,084
  21,282
  24,526
  27,963
  31,441
  34,916
  38,350
  41,713
  44,982
  48,145
  51,198
  54,139
  56,977
  59,724
  62,396
  65,010
  67,589
  70,152
  72,722
  75,318
  77,965
  80,682
Total cash flow (excl. dividends), $m
  1,273
  1,790
  2,460
  3,300
  4,318
  5,519
  6,895
  8,435
  10,117
  11,920
  13,680
  15,640
  17,639
  19,652
  21,660
  23,646
  25,597
  27,508
  29,374
  31,196
  32,977
  34,723
  36,444
  38,147
  39,845
  41,548
  43,269
  45,019
  46,809
  48,652
Retained Cash Flow (-), $m
  -342
  -499
  -701
  -954
  -1,262
  -1,624
  -2,039
  -2,503
  -3,011
  -3,554
  -4,125
  -4,717
  -5,319
  -5,927
  -6,532
  -7,131
  -7,720
  -8,296
  -8,858
  -9,408
  -9,945
  -10,472
  -10,990
  -11,504
  -12,016
  -12,530
  -13,049
  -13,576
  -14,116
  -14,672
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  931
  1,291
  1,759
  2,345
  3,057
  3,895
  4,857
  5,932
  7,107
  8,366
  9,554
  10,923
  12,319
  13,726
  15,128
  16,515
  17,878
  19,212
  20,516
  21,788
  23,032
  24,252
  25,453
  26,643
  27,829
  29,018
  30,220
  31,442
  32,693
  33,980
Discount rate, %
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.60
  17.43
  18.31
  19.22
  20.18
  21.19
  22.25
  23.36
  24.53
  25.76
  27.05
  28.40
  29.82
  31.31
  32.87
  34.52
  36.24
  38.06
  39.96
  41.96
  44.05
  46.26
  48.57
PV of cash for distribution, $m
  833
  1,022
  1,219
  1,405
  1,564
  1,679
  1,738
  1,736
  1,673
  1,558
  1,381
  1,203
  1,013
  824
  649
  494
  363
  258
  178
  118
  76
  47
  28
  16
  9
  5
  2
  1
  1
  0
Current shareholders' claim on cash, %
  78.6
  63.9
  53.4
  45.7
  39.8
  35.2
  31.6
  28.7
  26.3
  24.4
  22.9
  21.6
  20.5
  19.6
  18.8
  18.2
  17.7
  17.2
  16.8
  16.5
  16.2
  16.0
  15.8
  15.6
  15.5
  15.4
  15.4
  15.3
  15.3
  15.3

Consolidated Communications Holdings, Inc. is a holding company with operating subsidiaries that provide integrated communications services in consumer, commercial and carrier channels in California, Illinois, Iowa, Kansas, Minnesota, Missouri, North Dakota, Pennsylvania, South Dakota, Texas and Wisconsin. The Company operates as both an Incumbent Local Exchange Carrier (ILEC) and a Competitive Local Exchange Carrier (CLEC) dependent upon the territory served. The Company provides a range of services and products that include local and long-distance service, broadband Internet access, video services, Voice over Internet Protocol (VoIP), private line services, carrier grade access services, network capacity services over its regional fiber optic networks, cloud data services, data center and managed services, directory publishing, equipment sales and cloud data services. The Company markets services to its residential customers either individually or as a bundled package.

FINANCIAL RATIOS  of  Consolidated Communications Holdings (CNSL)

Valuation Ratios
P/E Ratio 44.6
Price to Sales 0.9
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 3.1
Price to Free Cash Flow 7.2
Growth Rates
Sales Growth Rate -4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -6.7%
Cap. Spend. - 3 Yr. Gr. Rate 3.2%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 805.3%
Total Debt to Equity 814%
Interest Coverage 2
Management Effectiveness
Return On Assets 2%
Ret/ On Assets - 3 Yr. Avg. 1%
Return On Total Capital 0.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 7.2%
Return On Equity - 3 Yr. Avg. 4.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 56.5%
Gross Margin - 3 Yr. Avg. 58.6%
EBITDA Margin 38%
EBITDA Margin - 3 Yr. Avg. 36.9%
Operating Margin 10.9%
Oper. Margin - 3 Yr. Avg. 9.7%
Pre-Tax Margin 5.1%
Pre-Tax Margin - 3 Yr. Avg. 3.3%
Net Profit Margin 2%
Net Profit Margin - 3 Yr. Avg. 1.4%
Effective Tax Rate 60.5%
Eff/ Tax Rate - 3 Yr. Avg. 85.7%
Payout Ratio 520%

CNSL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CNSL stock intrinsic value calculation we used $1059.574 million for the last fiscal year's total revenue generated by Consolidated Communications Holdings. The default revenue input number comes from 0001 income statement of Consolidated Communications Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CNSL stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.8%, whose default value for CNSL is calculated based on our internal credit rating of Consolidated Communications Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Consolidated Communications Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CNSL stock the variable cost ratio is equal to 88.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CNSL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7% for Consolidated Communications Holdings.

Corporate tax rate of 27% is the nominal tax rate for Consolidated Communications Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CNSL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CNSL are equal to 196.2%.

Life of production assets of 9 years is the average useful life of capital assets used in Consolidated Communications Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CNSL is equal to -2.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $573.942 million for Consolidated Communications Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 71.253 million for Consolidated Communications Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Consolidated Communications Holdings at the current share price and the inputted number of shares is $0.9 billion.

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COMPANY NEWS

▶ Unions Ratify Labor Agreements in Northern New England   [Aug-10-18 12:30PM  GlobeNewswire]
▶ Consolidated Communications Announces Quarterly Dividend   [Jul-30-18 05:00PM  GlobeNewswire]
▶ Consolidated Communications Launches Cloud Peer Connect   [Jun-13-18 03:26PM  GlobeNewswire]
▶ Consolidated Communications: 1Q Earnings Snapshot   [May-03-18 09:51AM  Associated Press]
▶ Consolidated Communications Announces Quarterly Dividend   [May-01-18 08:00AM  GlobeNewswire]
▶ Consolidated Communications Launches SD-WAN   [Apr-30-18 04:23PM  GlobeNewswire]
▶ New Strong Sell Stocks for April 4th   [Apr-04-18 09:18AM  Zacks]
▶ Consolidated Communications posts 4Q profit   [10:26AM  Associated Press]
▶ Consolidated Communications Announces Quarterly Dividend   [Feb-26-18 08:00AM  GlobeNewswire]
▶ Value-Adding Utilities Dividend Stocks To Buy Now   [Feb-09-18 07:02AM  Simply Wall St.]
▶ Consolidated Communications Launches On-site Secure   [Jan-29-18 02:16PM  GlobeNewswire]
▶ 7 Top Picks For 2018 And Their Corresponding ETFs   [Jan-05-18 01:37PM  Benzinga]
▶ Stocks That Fell to 3-Year Lows in the Week of Dec. 29   [Dec-31-17 09:52AM  GuruFocus.com]
▶ December Utilities Dividend Stock Picks   [Dec-10-17 07:02AM  Simply Wall St.]
▶ 3 Dicey Tech Dividends Up To 13.3% - Sell Now!   [Nov-12-17 08:12AM  Forbes]
▶ Consolidated Communications posts 3Q loss   [08:43AM  Associated Press]
▶ Consolidated Communications Announces Quarterly Dividend   [Oct-31-17 09:00AM  GlobeNewswire]
▶ Is Hormel a Good Dividend Stock?   [Aug-13-17 04:33PM  Motley Fool]
▶ Consolidated Communications posts 2Q loss   [Aug-04-17 02:36AM  Associated Press]
▶ Consolidated Communications Announces Quarterly Dividend   [Aug-01-17 10:00AM  GlobeNewswire]
▶ Consolidated Communications launches CCI All Access App   [Jul-28-17 11:00AM  GlobeNewswire]

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