ML on TCM today (yanked this from yahoo):
Estimates (Sep) 2000A 2001E 2002E
EPS: $0.66 $0.83 $0.96
P/E: 17.5x 13.9x 12.1x
EPS Change (YoY): 27.3% 14.9%
Revenue 2,540 2,854 4,177
Cash Revenue 2,540 3,354 5,578
EBITDA 489 919 2,061
Adj. EBITDA 489 1,418 3,463
EV/Cash Revenue 1.8 1.9 1.1
EV/Adj/ EBITDA 9.3 4.5 1.8
Cash Flow/Share: $0.66 $1.29 $3.36
Price/Cash Flow: 17.5x 9.0x 3.3x
Dividend Rate: Nil Nil Nil
Opinion & Financial Data
Investment Opinion: D-1-1-9
Mkt. Value / Shares Outstanding (mn): $6.0 / 520
Book Value/Share (Dec-2000): $4.15
Price/Book Ratio: 2.79x
ROE 2001E Average: NA
LT Liability % of Capital: NA
Est. 5 Year EPS Growth: 36.0%
Next 5 Year Dividend Growth: NA
Stock Data
52-Week Range: $46.25-$11.59
Symbol / Exchange: TCM / NYSE
Options: None
Institutional Ownership-Vickers: 11.1%
Brokers Covering (First Call): 11
ML Industry Weightings & Ratings**
Highlights:
• We are reiterating our BUY rating on TyCom.
We believe the stock is being unfairly grouped
with riskier network builders.
• TyCom is profitable with $1.5B of net cash on
hand (i.e. comfortably fully funded) and a
$500mm share buyback program underway.
• TyCom’s 2001E P/E of 13.9x and PEG of 0.38
looks attractive in their own right.
• We also think these multiples are attractive
for the equipment business only (which earned
$0.66/shr in FY2000, for a historical P/E of
17.5x), thus investors effectively receive the
network business for virtually nothing!
• TyCom’s closest telecom services comparable
is Global Crossing (GX, D-1-1-9, $14.50),
which trades on EV/Adj EBITDA multiples of
7.7x for ’01E and 5.7x for ‘02E. Even
adjusting for Global Crossing’s more
advanced business network deployment, we
think TyCom is attractive on this measure.
• TyCom also looks attractive relative to optical
companies like Alcatel (2001PE of 25x and
PEG of 1.3x), Nortel (P/E of 28x and PEG of
1.3) and JDS Uniphase (P/E of 36x and PEG of
0.9x). |
