Public MarketsWhile a 2.0% drop in the Focus Enterprise-Focused Telecom Technology Index (EFTTI) over the course of a three-month period would normally be considered disappointing, given the current environment for public equities it seems like a victory. This is highlighted by comparing it to the three-month drop in the S&P 500 of nearly 10%, and it also beats out the 2.9% decline in the NASDAQ over the same time frame. Sector performance is not as strong when measured over the full year period as the 11.9% decline in the EFTTI stacks up unfavorably compared to the 1.1% decline in the S&P 500 and the 9.8% gain in the NASDAQ. Sector multiples are also down significantly compared to this same time last year.The sector revenue multiple dropped nearly a full turn from 4.8x to 4.0x, while the sector EBITDA multiple fell from 20.3x to 16.6x.
Not surprisingly given the current state of the public markets, it was a challenging three-month period for the FOCUS Communications Service Provider Index (CSPI). The sector plummeted just shy of 20% over this time frame, which was roughly in-line with the 20.0% drop in the S&P 500 but greater than the 14.2% drop in the NASDAQ over the corresponding time frame.The situation looks a bit better when measured over the full year period.The CSPI was down only 9.3% in the past 12 months, although once again this underperforms both the S&P 500 (down 8.8%) and the NASDAQ (down 0.4%). Sector multiples are lower than they were in the year-ago period, although the drop is not as dramatic as we might have feared.The sector revenue multiple dipped from 2.7x t0 2.5x, while the sector EBITDA multiple fell from 8.0x to 7.2x.