We look at Cumulus Media Inc. (NASDAQ:CMLS) a company in the Broadcasting – Radio industry currently at the attention of investors, to assess if it provides value for investors considering buying or selling it. Currently Cumulus Media Inc. is trading at $1.15 after moving down -8.73% in the previous day of trading. [Trend Analysis]
CMLS is trading with a trailing 12 month P/E multiple of 38.33 and an estimated forward P/E multiple of 4.01. The stock has an estimated 5 year annual growth of 10.01% and a PEG multiple of 3.83.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Cumulus Media 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 CMLS. 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 CMLS being 3.83, we consider Cumulus Media Inc. to likely be overpriced.
This analysis means that value buyers who do not currently hold Cumulus Media Inc. (NASDAQ:CMLS) should not consider buying and investors currently holding the stock should consider selling.
The mean analyst 12 month target price for Cumulus Media Inc. (NASDAQ:CMLS) is currently $4.03 or 250.43% above the current price. Additionally, the stock has been as high as $5.01 and as low as $1.13 in the last 52 weeks. Analysts are estimating that CMLS will report earnings per share of $0.04 next quarter.
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