Level 3 Communications (LVLT) has had quite the run-up since the end of August, gaining approximately 34%. So what’s going on?
Our last article we stated:
The overall numbers appear to show LVLT going nowhere, or worse, declining revenues but there is a hidden story if one starts to look under the hood. Over time enterprise growth will stand out as it becomes a bigger part of the overall revenue picture.
LVLT announced third-quarter results on October 30 but the market has been jumping aboard since September. Why? The CNS (Core Network Services revenue) enterprise story is coming to the forefront, i.e., the “hidden story” has surfaced.
Is it too late to climb aboard? We’ll update the CNS trends followed by a valuation and look at the debt.
CNS revenue consists of both Enterprise and Wholesale. The company defines each as follows:
The enterprise channel includes large, multi-national enterprises such as financial services companies, healthcare companies, content providers, and portal and search engine companies. Medium sized enterprises and regional service providers who buy services regionally or locally, as well as government markets, including the U.S. federal government, the systems integrators supporting the U.S. federal government, U.S. state and local governments, academic consortia, and certain academic institutions. The U.K. government channel is also included.
The wholesale channel includes revenue from incumbent and alternative carriers, global carriers, wireless carriers, cable companies, satellite companies, and voice service providers.
Enterprise revenue represents 65% of CNS revenue for Q3 and …
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