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4 Worries Facing Frontier Communications
Aug. 19, 2019 9:26 AM ET
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About: Frontier Communications Corporation (FTR), Includes: CTL
Michael Henage
Long only, value, Growth, growth at reasonable price
(2,896 followers)
Summary
Frontier residential and commercial customers are leaving in droves. Not much else matters when you are losing customers.
Management had to admit that its inability to grow revenue and customers will cut its "transformation savings" by at least half.
Frontier's core free cash flow is a focus for management, but it's heading in the wrong direction.
The company has a low debt load over the next two years. Unfortunately, moving debt to a later date doesn't pay it off.
At current prices, it's hard to believe that Frontier Communications (NASDAQ:FTR) used to trade at $50, $70, or even $100+ per share. After the company's most recent earnings report, it seems many investors decided to run for the exits. With the stock down more than 30% since earnings, the shares now belong to the sub-$1 club. Frontier's management said it wants to improve unit trends, realize its transformation targets, drive free cash flow, and reduce leverage. Unfortunately, there doesn't seem to be a clear path to accomplish these goals. Buyers of the stock seem to be falling for the idea that a stock that's this far down can't go lower.
4 Worries Facing Frontier Communications
Aug. 19, 2019 9:26 AM ET
|
About: Frontier Communications Corporation (FTR), Includes: CTL
Michael Henage
Long only, value, Growth, growth at reasonable price
(2,896 followers)
Summary
Frontier residential and commercial customers are leaving in droves. Not much else matters when you are losing customers.
Management had to admit that its inability to grow revenue and customers will cut its "transformation savings" by at least half.
Frontier's core free cash flow is a focus for management, but it's heading in the wrong direction.
The company has a low debt load over the next two years. Unfortunately, moving debt to a later date doesn't pay it off.
At current prices, it's hard to believe that Frontier Communications (NASDAQ:FTR) used to trade at $50, $70, or even $100+ per share. After the company's most recent earnings report, it seems many investors decided to run for the exits. With the stock down more than 30% since earnings, the shares now belong to the sub-$1 club. Frontier's management said it wants to improve unit trends, realize its transformation targets, drive free cash flow, and reduce leverage. Unfortunately, there doesn't seem to be a clear path to accomplish these goals. Buyers of the stock seem to be falling for the idea that a stock that's this far down can't go lower.