Frontier Communications (FTR, Financial) has expanded its market share by signing a strategic partnership agreement with Intuit for providing premium technical customer service support for several of its products such as Payroll, Payment, QuickBooks Desktop and QuickBooks Online products.
Frontier has also aggressively launched marketing campaigns for its products to enhance their visibility in the marketplace including communication with new customers, exploring new communities, launch Connecticut to Frontier offerings, local engagements and products. These significant efforts although are believed to increase the company’s costs but they will definitely position the company at the top slot.
Overall, since the beginning of 2013, Frontier has added 199,000 fresh broadband customers and expects this solid momentum to continue robustly.
Adding subscribers at a good pace
Frontier in partnership with CoBank and DISH networks launched a new price campaign called America’s Best Communities price campaign or ABC, a month earlier for accelerating steady growth, revitalizations and economic development in small rural communities and towns.
Frontier Secure is increasingly adding value for Frontier’s broadband customers along with differentiating the brand from its key competitors. There’s tremendous broadband market share growth opportunity with Frontier looking at its small current share of less than 25% in its 27 states leaving Connecticut.
In addition, Frontier added 18,000 extra broadband households and also windup its development to more than 33,000 CAF households in the third quarter and thus expanding its network for the quarter.
Fundamentals and conclusion
The trailing P/E and forward P/E ratios of 37.08 and 24.50 respectively represent solid cost-cutting efforts of the company. However, it’s poor compared to the healthy industry’s average P/E of 17.70. The PEG ratio of -1.12 indicate no growth decline compared to marginally healthier industry’s average of 2.09. The profit margin of 4.04% is satisfactory. However, revenue per share and diluted EPS of 4.65 and 0.19 respectively depicts poor investor earnings.
The quarterly revenue growth of -3.70% is poorer to the marginally better industry’s average of 6.00%. But, the quarterly earnings growth of 18.60% is impressive and suggests solid shareholder earnings growth. The current ratio of 2.19 depicts the robustness of the company’s balance sheet. Still, investors are advised to hold the stock as of now till a major turnaround occurs and Frontier returns to profitability looking at the concerning long-term growth prospects indicated by the CAGR for the next 5 years per annum of -30.60%, unhealthy compared to the industry’s average of 8.93%.
