FairPoint Communications (FRP) and Its Rivals Critical Review

FairPoint Communications (NASDAQ: FRP) is one of 45 public companies in the “Integrated Telecommunications Services” industry, but how does it compare to its rivals? We will compare FairPoint Communications to related companies based on the strength of its institutional ownership, earnings, valuation, analyst recommendations, profitability, dividends and risk.

Insider & Institutional Ownership

88.6% of FairPoint Communications shares are held by institutional investors. Comparatively, 58.3% of shares of all “Integrated Telecommunications Services” companies are held by institutional investors. 7.6% of FairPoint Communications shares are held by insiders. Comparatively, 4.5% of shares of all “Integrated Telecommunications Services” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares FairPoint Communications and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
FairPoint Communications N/A N/A 7.03
FairPoint Communications Competitors $13.52 billion $4.52 billion 5.22

FairPoint Communications’ rivals have higher revenue and earnings than FairPoint Communications. FairPoint Communications is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

FairPoint Communications has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, FairPoint Communications’ rivals have a beta of 0.95, meaning that their average stock price is 5% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for FairPoint Communications and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FairPoint Communications 0 1 0 0 2.00
FairPoint Communications Competitors 531 1524 1824 65 2.36

FairPoint Communications currently has a consensus price target of $17.00, suggesting a potential upside of 6.58%. As a group, “Integrated Telecommunications Services” companies have a potential upside of 44.54%. Given FairPoint Communications’ rivals stronger consensus rating and higher possible upside, analysts plainly believe FairPoint Communications has less favorable growth aspects than its rivals.

Profitability

This table compares FairPoint Communications and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FairPoint Communications -11.81% N/A -7.88%
FairPoint Communications Competitors 0.59% -0.73% 1.36%

Summary

FairPoint Communications rivals beat FairPoint Communications on 8 of the 11 factors compared.

About FairPoint Communications

FairPoint Communications, Inc. is a provider of data, voice and communications services to business, wholesale and residential customers within its service territories. The Company offers its customers a suite of services, such as Ethernet, Session Initiation Protocol Trunking (SIP-Trunking), hosted Primary Branch Exchange (hosted PBX), managed services, data center colocation services, high capacity data transport and other Internet protocol (IP)-based services over its fiber-based network. It also offers Internet access, high-speed data, and local and long distance voice services. It provides services, such as Data and Internet Services, which include optical, Ethernet, Ethernet virtual circuit technology for cellular backhaul and private line special access services. It offers Voice Services, which include Local Calling Services, Long Distance Services and 9-1-1 Services. It also offers Network Transport Services, Interstate Access Charges and Intrastate Access Charges.

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