Intrinsic value of CenturyLink - CTL

Previous Close

$22.90

  Intrinsic Value

$55.38

stock screener

  Rating & Target

str. buy

+142%

Previous close

$22.90

 
Intrinsic value

$55.38

 
Up/down potential

+142%

 
Rating

str. buy

We calculate the intrinsic value of CTL 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 24.7

 

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, %
  41.20
  37.58
  34.32
  31.39
  28.75
  26.38
  24.24
  22.31
  20.58
  19.02
  17.62
  16.36
  15.22
  14.20
  13.28
  12.45
  11.71
  11.04
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.11
  6.89
  6.71
Revenue, $m
  24,930
  34,299
  46,071
  60,533
  77,937
  98,493
  122,366
  149,671
  180,477
  214,813
  252,667
  294,003
  338,762
  386,872
  438,254
  492,831
  550,531
  611,294
  675,073
  741,838
  811,579
  884,304
  960,044
  1,038,848
  1,120,788
  1,205,954
  1,294,458
  1,386,429
  1,482,017
  1,581,387
Variable operating expenses, $m
  19,808
  25,626
  32,937
  41,919
  52,727
  65,494
  80,320
  97,278
  116,411
  137,735
  156,920
  182,591
  210,389
  240,268
  272,179
  306,074
  341,909
  379,645
  419,256
  460,720
  504,033
  549,199
  596,237
  645,179
  696,068
  748,960
  803,926
  861,045
  920,410
  982,124
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
  19,808
  25,626
  32,937
  41,919
  52,727
  65,494
  80,320
  97,278
  116,411
  137,735
  156,920
  182,591
  210,389
  240,268
  272,179
  306,074
  341,909
  379,645
  419,256
  460,720
  504,033
  549,199
  596,237
  645,179
  696,068
  748,960
  803,926
  861,045
  920,410
  982,124
Operating income, $m
  5,122
  8,673
  13,134
  18,614
  25,209
  32,999
  42,045
  52,393
  64,067
  77,078
  95,748
  111,412
  128,373
  146,604
  166,075
  186,757
  208,623
  231,649
  255,817
  281,118
  307,546
  335,105
  363,807
  393,669
  424,720
  456,994
  490,532
  525,384
  561,607
  599,263
EBITDA, $m
  13,328
  18,337
  24,631
  32,362
  41,667
  52,656
  65,419
  80,017
  96,487
  114,843
  135,081
  157,181
  181,110
  206,830
  234,300
  263,478
  294,326
  326,811
  360,909
  396,603
  433,888
  472,768
  513,260
  555,391
  599,197
  644,729
  692,045
  741,215
  792,318
  845,444
Interest expense (income), $m
  1,301
  2,037
  3,187
  4,676
  6,548
  8,847
  11,615
  14,883
  18,679
  23,020
  27,919
  33,378
  39,397
  45,969
  53,086
  60,735
  68,905
  77,583
  86,757
  96,418
  106,559
  117,175
  128,264
  139,827
  151,870
  164,400
  177,428
  190,969
  205,042
  219,665
  234,863
Earnings before tax, $m
  3,085
  5,486
  8,458
  12,066
  16,362
  21,384
  27,162
  33,714
  41,046
  49,159
  62,370
  72,015
  82,404
  93,518
  105,340
  117,852
  131,040
  144,891
  159,399
  174,559
  190,371
  206,841
  223,979
  241,800
  260,321
  279,566
  299,563
  320,343
  341,942
  364,400
Tax expense, $m
  833
  1,481
  2,284
  3,258
  4,418
  5,774
  7,334
  9,103
  11,083
  13,273
  16,840
  19,444
  22,249
  25,250
  28,442
  31,820
  35,381
  39,121
  43,038
  47,131
  51,400
  55,847
  60,474
  65,286
  70,287
  75,483
  80,882
  86,493
  92,324
  98,388
Net income, $m
  2,252
  4,005
  6,174
  8,808
  11,944
  15,610
  19,829
  24,611
  29,964
  35,886
  45,530
  52,571
  60,155
  68,268
  76,898
  86,032
  95,659
  105,771
  116,361
  127,428
  138,971
  150,994
  163,505
  176,514
  190,034
  204,083
  218,681
  233,850
  249,618
  266,012

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
  106,540
  146,577
  196,885
  258,687
  333,062
  420,910
  522,931
  639,619
  771,271
  918,003
  1,079,775
  1,256,425
  1,447,703
  1,653,299
  1,872,880
  2,106,115
  2,352,697
  2,612,368
  2,884,927
  3,170,249
  3,468,287
  3,779,079
  4,102,752
  4,439,521
  4,789,691
  5,153,649
  5,531,871
  5,924,912
  6,333,406
  6,758,065
Adjusted assets (=assets-cash), $m
  106,540
  146,577
  196,885
  258,687
  333,062
  420,910
  522,931
  639,619
  771,271
  918,003
  1,079,775
  1,256,425
  1,447,703
  1,653,299
  1,872,880
  2,106,115
  2,352,697
  2,612,368
  2,884,927
  3,170,249
  3,468,287
  3,779,079
  4,102,752
  4,439,521
  4,789,691
  5,153,649
  5,531,871
  5,924,912
  6,333,406
  6,758,065
Revenue / Adjusted assets
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
Average production assets, $m
  54,722
  75,286
  101,126
  132,870
  171,071
  216,192
  268,593
  328,528
  396,148
  471,514
  554,605
  645,338
  743,584
  849,184
  961,967
  1,081,764
  1,208,416
  1,341,791
  1,481,785
  1,628,335
  1,781,416
  1,941,048
  2,107,296
  2,280,271
  2,460,129
  2,647,069
  2,841,335
  3,043,212
  3,253,027
  3,471,145
Working capital, $m
  -1,147
  -1,578
  -2,119
  -2,785
  -3,585
  -4,531
  -5,629
  -6,885
  -8,302
  -9,881
  -11,623
  -13,524
  -15,583
  -17,796
  -20,160
  -22,670
  -25,324
  -28,120
  -31,053
  -34,125
  -37,333
  -40,678
  -44,162
  -47,787
  -51,556
  -55,474
  -59,545
  -63,776
  -68,173
  -72,744
Total debt, $m
  59,012
  86,598
  121,260
  163,842
  215,086
  275,613
  345,905
  426,304
  517,012
  618,110
  729,571
  851,283
  983,073
  1,124,729
  1,276,020
  1,436,719
  1,606,615
  1,785,527
  1,973,321
  2,169,908
  2,375,255
  2,589,391
  2,812,402
  3,044,436
  3,285,703
  3,536,470
  3,797,065
  4,067,870
  4,349,323
  4,641,913
Total liabilities, $m
  73,406
  100,992
  135,654
  178,236
  229,480
  290,007
  360,299
  440,698
  531,406
  632,504
  743,965
  865,677
  997,467
  1,139,123
  1,290,414
  1,451,113
  1,621,009
  1,799,921
  1,987,715
  2,184,302
  2,389,649
  2,603,785
  2,826,796
  3,058,830
  3,300,097
  3,550,864
  3,811,459
  4,082,264
  4,363,717
  4,656,307
Total equity, $m
  33,134
  45,586
  61,231
  80,452
  103,582
  130,903
  162,631
  198,922
  239,865
  285,499
  335,810
  390,748
  450,236
  514,176
  582,466
  655,002
  731,689
  812,446
  897,212
  985,947
  1,078,637
  1,175,293
  1,275,956
  1,380,691
  1,489,594
  1,602,785
  1,720,412
  1,842,647
  1,969,689
  2,101,758
Total liabilities and equity, $m
  106,540
  146,578
  196,885
  258,688
  333,062
  420,910
  522,930
  639,620
  771,271
  918,003
  1,079,775
  1,256,425
  1,447,703
  1,653,299
  1,872,880
  2,106,115
  2,352,698
  2,612,367
  2,884,927
  3,170,249
  3,468,286
  3,779,078
  4,102,752
  4,439,521
  4,789,691
  5,153,649
  5,531,871
  5,924,911
  6,333,406
  6,758,065
Debt-to-equity ratio
  1.780
  1.900
  1.980
  2.040
  2.080
  2.110
  2.130
  2.140
  2.160
  2.170
  2.170
  2.180
  2.180
  2.190
  2.190
  2.190
  2.200
  2.200
  2.200
  2.200
  2.200
  2.200
  2.200
  2.210
  2.210
  2.210
  2.210
  2.210
  2.210
  2.210
Adjusted equity ratio
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,252
  4,005
  6,174
  8,808
  11,944
  15,610
  19,829
  24,611
  29,964
  35,886
  45,530
  52,571
  60,155
  68,268
  76,898
  86,032
  95,659
  105,771
  116,361
  127,428
  138,971
  150,994
  163,505
  176,514
  190,034
  204,083
  218,681
  233,850
  249,618
  266,012
Depreciation, amort., depletion, $m
  8,206
  9,664
  11,497
  13,748
  16,457
  19,658
  23,374
  27,625
  32,420
  37,765
  39,334
  45,769
  52,736
  60,226
  68,225
  76,721
  85,703
  95,162
  105,091
  115,485
  126,342
  137,663
  149,454
  161,721
  174,477
  187,735
  201,513
  215,831
  230,711
  246,180
Funds from operations, $m
  10,458
  13,669
  17,671
  22,556
  28,401
  35,268
  43,202
  52,236
  62,384
  73,652
  84,864
  98,340
  112,891
  128,494
  145,123
  162,753
  181,362
  200,933
  221,452
  242,913
  265,313
  288,657
  312,959
  338,235
  364,511
  391,818
  420,194
  449,681
  480,329
  512,192
Change in working capital, $m
  -335
  -431
  -542
  -665
  -801
  -946
  -1,098
  -1,256
  -1,417
  -1,579
  -1,741
  -1,901
  -2,059
  -2,213
  -2,364
  -2,511
  -2,654
  -2,795
  -2,934
  -3,071
  -3,208
  -3,345
  -3,484
  -3,625
  -3,769
  -3,918
  -4,071
  -4,231
  -4,397
  -4,571
Cash from operations, $m
  10,793
  14,100
  18,212
  23,222
  29,202
  36,214
  44,301
  53,492
  63,801
  75,231
  86,605
  100,241
  114,950
  130,707
  147,486
  165,263
  184,017
  203,728
  224,386
  245,984
  268,521
  292,003
  316,443
  341,860
  368,280
  395,736
  424,265
  453,912
  484,726
  516,763
Maintenance CAPEX, $m
  -2,748
  -3,881
  -5,339
  -7,172
  -9,423
  -12,133
  -15,333
  -19,049
  -23,300
  -28,096
  -33,441
  -39,334
  -45,769
  -52,736
  -60,226
  -68,225
  -76,721
  -85,703
  -95,162
  -105,091
  -115,485
  -126,342
  -137,663
  -149,454
  -161,721
  -174,477
  -187,735
  -201,513
  -215,831
  -230,711
New CAPEX, $m
  -15,970
  -20,565
  -25,840
  -31,743
  -38,201
  -45,121
  -52,401
  -59,935
  -67,621
  -75,366
  -83,091
  -90,733
  -98,246
  -105,600
  -112,784
  -119,796
  -126,652
  -133,375
  -139,995
  -146,550
  -153,081
  -159,632
  -166,248
  -172,975
  -179,857
  -186,940
  -194,266
  -201,877
  -209,815
  -218,118
Cash from investing activities, $m
  -18,718
  -24,446
  -31,179
  -38,915
  -47,624
  -57,254
  -67,734
  -78,984
  -90,921
  -103,462
  -116,532
  -130,067
  -144,015
  -158,336
  -173,010
  -188,021
  -203,373
  -219,078
  -235,157
  -251,641
  -268,566
  -285,974
  -303,911
  -322,429
  -341,578
  -361,417
  -382,001
  -403,390
  -425,646
  -448,829
Free cash flow, $m
  -7,926
  -10,345
  -12,967
  -15,694
  -18,422
  -21,040
  -23,433
  -25,492
  -27,119
  -28,230
  -29,927
  -29,825
  -29,064
  -27,630
  -25,523
  -22,758
  -19,356
  -15,350
  -10,771
  -5,657
  -45
  6,029
  12,531
  19,431
  26,702
  34,319
  42,264
  50,521
  59,080
  67,935
Issuance/(repayment) of debt, $m
  21,286
  27,586
  34,662
  42,582
  51,244
  60,527
  70,292
  80,398
  90,708
  101,098
  111,461
  121,712
  131,790
  141,656
  151,291
  160,699
  169,895
  178,913
  187,793
  196,587
  205,348
  214,136
  223,011
  232,034
  241,267
  250,767
  260,595
  270,805
  281,452
  292,590
Issuance/(repurchase) of shares, $m
  7,391
  8,447
  9,472
  10,412
  11,187
  11,710
  11,900
  11,679
  10,980
  9,747
  4,781
  2,367
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  28,677
  36,033
  44,134
  52,994
  62,431
  72,237
  82,192
  92,077
  101,688
  110,845
  116,242
  124,079
  131,790
  141,656
  151,291
  160,699
  169,895
  178,913
  187,793
  196,587
  205,348
  214,136
  223,011
  232,034
  241,267
  250,767
  260,595
  270,805
  281,452
  292,590
Total cash flow (excl. dividends), $m
  20,751
  25,687
  31,167
  37,300
  44,008
  51,197
  58,759
  66,585
  74,569
  82,615
  86,315
  94,254
  102,726
  114,026
  125,769
  137,941
  150,539
  163,563
  177,023
  190,930
  205,303
  220,165
  235,542
  251,466
  267,968
  285,086
  302,858
  321,326
  340,533
  360,525
Retained Cash Flow (-), $m
  -9,643
  -12,452
  -15,646
  -19,220
  -23,131
  -27,321
  -31,728
  -36,290
  -40,944
  -45,633
  -50,311
  -54,938
  -59,487
  -63,940
  -68,290
  -72,536
  -76,687
  -80,758
  -84,766
  -88,735
  -92,690
  -96,656
  -100,662
  -104,735
  -108,903
  -113,191
  -117,627
  -122,236
  -127,042
  -132,069
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
  11,108
  13,236
  15,521
  18,080
  20,878
  23,876
  27,031
  30,295
  33,626
  36,982
  36,004
  39,316
  43,239
  50,086
  57,479
  65,405
  73,852
  82,806
  92,257
  102,194
  112,613
  123,508
  134,880
  146,730
  159,066
  171,895
  185,231
  199,090
  213,491
  228,456
Discount rate, %
  9.50
  9.98
  10.47
  11.00
  11.55
  12.12
  12.73
  13.37
  14.04
  14.74
  15.47
  16.25
  17.06
  17.91
  18.81
  19.75
  20.74
  21.77
  22.86
  24.01
  25.21
  26.47
  27.79
  29.18
  30.64
  32.17
  33.78
  35.47
  37.24
  39.10
PV of cash for distribution, $m
  10,144
  10,944
  11,512
  11,911
  12,089
  12,016
  11,683
  11,104
  10,311
  9,352
  7,396
  6,455
  5,579
  4,987
  4,333
  3,658
  3,000
  2,388
  1,845
  1,382
  1,003
  705
  479
  315
  199
  122
  72
  41
  22
  11
Current shareholders' claim on cash, %
  77.0
  62.0
  51.8
  44.6
  39.4
  35.6
  32.7
  30.6
  29.1
  28.0
  27.6
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4
  27.4

CenturyLink, Inc. is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include Enterprise, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and Consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services.

FINANCIAL RATIOS  of  CenturyLink (CTL)

Valuation Ratios
P/E Ratio 20
Price to Sales 0.7
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 2.7
Price to Free Cash Flow 7.7
Growth Rates
Sales Growth Rate -2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.8%
Cap. Spend. - 3 Yr. Gr. Rate -0.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.5
LT Debt to Equity 135.7%
Total Debt to Equity 146.9%
Interest Coverage 2
Management Effectiveness
Return On Assets 3%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 1.9%
Ret/ On T. Cap. - 3 Yr. Avg. 2.2%
Return On Equity 4.6%
Return On Equity - 3 Yr. Avg. 5.1%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 55.5%
Gross Margin - 3 Yr. Avg. 56.2%
EBITDA Margin 35.7%
EBITDA Margin - 3 Yr. Avg. 37.3%
Operating Margin 13.3%
Oper. Margin - 3 Yr. Avg. 13.8%
Pre-Tax Margin 5.8%
Pre-Tax Margin - 3 Yr. Avg. 6.4%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 4.3%
Effective Tax Rate 38.6%
Eff/ Tax Rate - 3 Yr. Avg. 34.1%
Payout Ratio 186.4%

CTL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTL stock intrinsic value calculation we used $17656 million for the last fiscal year's total revenue generated by CenturyLink. The default revenue input number comes from 0001 income statement of CenturyLink. 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 CTL stock valuation model: a) initial revenue growth rate of 41.2% 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 9.5%, whose default value for CTL is calculated based on our internal credit rating of CenturyLink, 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 CenturyLink.
    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 CTL stock the variable cost ratio is equal to 86.6%.

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 CTL 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 5.4% for CenturyLink.

Corporate tax rate of 27% is the nominal tax rate for CenturyLink. 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 CTL 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 CTL are equal to 219.5%.

Life of production assets of 14.1 years is the average useful life of capital assets used in CenturyLink 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 CTL is equal to -4.6%. 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 - $23491 million for CenturyLink - 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 1080.12 million for CenturyLink 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 CenturyLink at the current share price and the inputted number of shares is $24.7 billion.

RELATED COMPANIES Price Int.Val. Rating
VZ Verizon Commun 53.54 66.50  buy
T AT&T 33.91 51.95  str.buy
CMCSA Comcast Cl A 35.63 50.58  buy
ALSK Alaska Communi 1.65 0.99  sell
IBM International 150.03 191.80  buy
CABO Cable One 861.14 691.48  hold

COMPANY NEWS

▶ T-Mobile hires CenturyLink CFO to lead merger strategy with Sprint   [Sep-25-18 02:39PM  American City Business Journals]
▶ Better Buy: CenturyLink vs. Verizon   [Sep-22-18 04:04PM  Motley Fool]
▶ Sector Change May be a Non-Starter for Telecom Stocks   [Sep-21-18 11:16AM  ETF Trends]
▶ 5 Low-P/E Ratio Stocks in Prem Watsa's Portfolio   [Sep-19-18 06:53PM  GuruFocus.com]
▶ Can CenturyLink's Dividend Even Survive?   [06:02AM  Motley Fool]
▶ Keeley's ADB Cos. casts 63% uptick with data use increase   [Sep-18-18 03:32PM  American City Business Journals]
▶ CenturyLink dials up former Apple executive as new security chief   [10:15AM  American City Business Journals]
▶ 3 Dividend Stocks That Pay You More Than AT&T Does   [Sep-14-18 02:00PM  Motley Fool]
▶ 3 Risky Dividend Stocks With Fat Yields   [Sep-12-18 12:02PM  InvestorPlace]
▶ Why CenturyLink Stock Gained 14% in August   [Sep-06-18 01:31PM  Motley Fool]
▶ 5 Dividend Stocks Worth Keeping an Eye On   [Sep-05-18 03:39PM  InvestorPlace]
▶ CenturyLink to present at investor conferences   [Sep-04-18 09:00AM  PR Newswire]
▶ 3 Stocks the World's Best Investors Are Buying Right Now   [Sep-03-18 11:03AM  Motley Fool]
▶ Better Buy: CenturyLink, Inc. vs. T-Mobile US, Inc.   [Aug-31-18 08:37PM  Motley Fool]
▶ 4 Telecom Stocks in Focus as AI and ML Achieve Prominence   [Aug-30-18 09:49AM  InvestorPlace]
▶ 3 Dividend Stocks I'd Never Buy   [08:04AM  Motley Fool]
▶ CenturyLink Earnings Show the Turnaround Is Underway   [Aug-22-18 10:47PM  Motley Fool]
▶ CenturyLink declares quarterly cash dividend   [Aug-21-18 06:45PM  PR Newswire]
▶ Stocks - Cisco Gains Midday, Lifting Telecom Shares   [Aug-16-18 02:31PM  Investing.com]
▶ CenturyLink's Rally Isn't Done Yet   [Aug-15-18 10:56AM  Barrons.com]
▶ Stocks - Sysco Surges Midday; Netflix Falls   [Aug-13-18 03:05PM  Investing.com]
▶ 3 Top Value Stocks to Buy Right Now   [Aug-11-18 02:10PM  Motley Fool]
▶ CenturyLink's Earnings Steal the Show   [12:58PM  Barrons.com]
▶ CenturyLink: 2Q Earnings Snapshot   [04:23PM  Associated Press]
▶ CenturyLink, Inc. to Host Earnings Call   [03:00PM  ACCESSWIRE]
▶ 3 Dividend Investing Tips That Could Earn You Thousands   [Aug-02-18 10:00AM  Motley Fool]
▶ CenturyLink Connects Enterprises to IBM Cloud   [Aug-01-18 09:00AM  PR Newswire]
▶ New Strong Sell Stocks for July 24th   [Jul-24-18 06:55AM  Zacks]
▶ [$$] Revamping Telecom   [Jul-21-18 12:01AM  Barrons.com]
▶ 4 High Dividend Stocks in the S&P 500 to Buy for Income   [Jul-03-18 08:45AM  InvestorPlace]
▶ Comcast says services being restored after outage   [Jun-29-18 06:36PM  Reuters]
▶ CenturyLink Sets Second Quarter 2018 Earnings Call Date   [Jun-28-18 09:00AM  PR Newswire]
▶ CenturyLink Can Connect With More Gains   [12:08PM  Barrons.com]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.