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Value Perspectives: Cincinnati Bell (NYSE:CBB)
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We look at Cincinnati Bell Inc. (NYSE:CBB) [Trend Analysis] a company in the Technology industry being focused on by many investors, to assess if it provides value for investors considering buying or selling it. Currently Cincinnati Bell Inc. is trading at $3.82 after moving up 5.82% in the previous day of trading.
CBB is trading with a trailing 12 month P/E multiple of 13.64 and an estimated forward P/E multiple of 38.20. The stock has an estimated 5 year annual growth of 3.00% and a PEG multiple of 4.55.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Cincinnati Bell Inc. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of CBB. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of CBB being 4.55, we consider Cincinnati Bell Inc. to likely be overpriced.
This analysis means that value buyers who do not currently hold Cincinnati Bell Inc. (NYSE:CBB) should not consider buying and investors currently holding the stock should consider selling.
The mean analyst 12 month target price for Cincinnati Bell Inc. (NYSE:CBB) is currently $3.88 or 1.57% above the current price. Additionally, the stock has been as high as $4.13 and as low as $2.85 in the last 52 weeks. Analysts are estimating that CBB will report earnings per share of $0.00 next quarter.