Standing out among the Street's worst performers today is Frontier Communications, a telecom services company whose shares slumped -5.6% to a price of $21.31. They are now 44.58% below their average analyst target price of $38.45. FYBR lagged the S&P 500 index by -4.6% today and by -4.7% over the last year, returning -21.6%. The average analyst rating for the stock is buy.
Frontier Communications is in the communication services sector, which includes some defensive stocks, and others taking on a more cyclical profile. Defensive companies are those whose products and services are essential to consumers, and as a result do not generally experience significant share price drops during recessions.
Investors consider telephone, cable, and internet companies to be similar to utilities in that they provide essential service to the public. Other communications companies, such as those operating in the gaming, media, and entertainment industries may be more sensitive to economic conditions since consumers generally rely on discretionary income when purchasing these goods or services.
The P/E ratio is the company's share price divided by its earnings per share. In other words, it represents how much investors are willing to spend for each dollar of the company's earnings. As of the third quarter of 2022, the communication services sector has an average P/E ratio of 18.65, and the average for the S&P 500 is 15.97.
Frontier Communications's trailing 12 month P/E ratio is 1.0, based on its trailing Eps of $21.19. The company has a forward P/E ratio of 42.6 according to its forward Eps of $0.5 -- which is an estimate of what its earnings will look like in the next quarter.
Frontier communications's P/B ratio indicates that the market value of the company exceeds its book value by a factor of 1.1, but is still below the average P/B ratio of the Communication Services sector, which stood at 2.62 as of the second quarter of 2022.
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