Lumen Technologies (LUMN) AI Stock Analysis

• Market Cap: $3.61B
• Dividend Yield: N/A
• Average Volume (3M): 13.70M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.74
• Revenue Growth: -9.95%
• EPS Growth: 99.47%
• Country: US
• Employees: 25,000
• Sector: Communication Services
• Sector Strength: 83
• Industry: Telecommunications Services
• EPS (TTM): -0.06
• Shares Outstanding: 1,025,099,400
• 10 Day Avg. Volume: 9,275,486
• 30 Day Avg. Volume: 13,698,715
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 6.23
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 3.51
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.31
• Price Target Upside: 40.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Lumen Technologies' stock score reflects significant financial challenges, including declining revenue and high leverage. While recent earnings call data suggests improvements and strategic growth initiatives, these are counterbalanced by ongoing profitability issues and valuation concerns. Technical indicators further suggest caution, with the stock in a bearish trend. Investors should weigh the potential for strategic growth against the backdrop of financial instability.

Positive Factors

Earnings and Growth

Lumen is set to begin growing consolidated EBITDA significantly on an annual basis in 2026.

Potential Sale of Consumer Fiber Operations

AT&T and possibly its JV partner Gigapower are seen as top bidders for Lumen's consumer fiber operations, which would be positive as a buyer is expected to build at a faster pace.

Service Innovations

New service innovations that bypass costly cross-connects could be unmatched and game-changing for customers.

Negative Factors

Business Segment Improvement

Lumen needs to improve Business segment financials, which is likely to take time.

Financial Challenges

The company faces persistent legacy revenue declines, high leverage, potentially disruptive transformation investments, and rising costs associated with PCF related network builds.

Stock Valuation

The stock reacted negatively to the news because the valuation seemed low compared to previous reports.

Lumen Technologies Business Overview & Revenue Model

Company Description

Lumen Technologies, Inc., a facilities-based technology and communications company, provides various integrated products and services under the Lumen, Quantum Fiber, and CenturyLink brands to business and residential customers in the United States and internationally. The company operates in two segments, Business and Mass Markets. It offers compute and application services, such as cloud services, IT solutions, unified communication and collaboration solutions, colocation and data center services, content delivery services, and managed security services; and IP and data services, including VPN data network, Ethernet, internet protocol (IP), and voice over internet protocol. The company also provides fiber infrastructure services comprising high bandwidth optical wavelength networks; and unlit optical fiber and related professional services. In addition, it offers voice and other services, including private line services, a direct circuit or channel specifically dedicated for connecting two or more organizational sites; a portfolio of traditional time division multiplexing voice services; and synchronous optical network-based Ethernet, legacy data hosting services, and conferencing services. As of December 31, 2021, the company served approximately 4.5 million broadband subscribers. The company was formerly known as CenturyLink, Inc. and changed its name to Lumen Technologies, Inc. in September 2020. Lumen Technologies, Inc. was incorporated in 1968 and is headquartered in Monroe, Louisiana.

How the Company Makes Money

Lumen Technologies generates revenue through multiple streams, primarily from its business and mass markets segments. The business segment includes services such as network connectivity, hybrid IT solutions, cloud and managed services, and voice and collaboration tools, which are provided to enterprise customers, government agencies, and wholesale clients. The mass markets segment focuses on delivering broadband, voice, and other services to residential customers. Lumen benefits from strategic partnerships and collaborations with technology companies to enhance its service offerings. Additionally, the company capitalizes on its extensive fiber network and digital infrastructure to support data-intensive applications, which is a significant factor contributing to its earnings.

Lumen Technologies Financial Statement Overview

Summary

Lumen Technologies faces significant financial challenges, including declining revenues and profitability issues, reflected in negative net income and a high debt-to-equity ratio. However, there are signs of improved operating efficiency and positive cash flow ratios, suggesting some resilience amidst financial difficulties.

Income Statement

Lumen Technologies has experienced declining revenue over the years, with TTM revenue of $13.0 billion compared to $20.7 billion in 2020. The gross profit margin for TTM is approximately 55.43%, which is strong, but the net profit margin is negative due to a net loss. EBIT and EBITDA margins have improved in the TTM compared to 2023's negative figures, indicating some recovery in operating efficiency.

Balance Sheet

The company's balance sheet shows high leverage, with a debt-to-equity ratio of approximately 62.05 in TTM. Stockholders' equity has significantly decreased over time, impacting the equity ratio, which stands at about 0.86% for TTM, indicating a highly leveraged financial structure with potential solvency risks.

Cash Flow

Lumen's cash flow analysis reveals a positive operating cash flow to net income ratio, suggesting effective cash generation despite net losses. The free cash flow growth is negative compared to prior years, but the free cash flow to net income ratio is positive, indicating some level of cash flow stability despite financial challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.11B	14.56B	17.48B	19.69B	20.71B
	Gross Profit
6.41B	7.41B	9.61B	11.20B	11.78B
	EBIT
460.00M	-9.58B	3.54B	4.29B	3.53B
	EBITDA
4.10B	-6.09B	3.58B	8.52B	5.90B
	Net Income Common Stockholders
-55.00M	-10.30B	-1.55B	2.03B	-1.23B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.89B	2.23B	1.25B	354.00M	406.00M
	Total Assets
33.50B	34.02B	45.58B	57.99B	59.39B
	Total Debt
18.16B	20.26B	20.92B	29.37B	32.22B
	Net Debt
16.27B	18.02B	19.66B	29.01B	31.81B
	Total Liabilities
33.03B	33.60B	35.14B	46.15B	48.23B
	Stockholders Equity
464.00M	417.00M	10.44B	11.84B	11.16B
Cash Flow		Free Cash Flow
1.10B	-940.00M	1.72B	3.60B	2.79B
	Operating Cash Flow
4.33B	2.16B	4.74B	6.50B	6.52B
	Investing Cash Flow
-2.83B	-1.20B	5.48B	-2.71B	-3.56B
	Financing Cash Flow
-1.85B	-18.00M	-9.31B	-3.81B	-4.25B

Lumen Technologies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.78
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LUMN, the sentiment is Neutral. The current price of 3.78 is above the 20-day moving average (MA) of 3.42, below the 50-day MA of 4.13, and below the 200-day MA of 5.41, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 52.85 is Neutral, neither overbought nor oversold. The STOCH value of 83.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LUMN.

Lumen Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHI	78 Outperform	$5.06B	9.06	29.05%	5.33%	-0.15%	17.96%
TIGO	77 Outperform	$5.76B	22.66	7.13%	5.17%	2.53%	―
TKC	75 Outperform	$5.09B	11.49	6.76%	2.61%	8.78%	-21.85%
TEO	64 Neutral	$4.20B	4.30	23.27%	―	-26.74%	―
Sector *	59 Neutral	$13.76B	7.64	-1.94%	3.86%	2.38%	-36.56%
TDS	58 Neutral	$4.04B	―	-0.54%	0.43%	-3.80%	83.27%
LUMN	49 Neutral	$3.61B	―	-12.49%	―	-9.95%	99.47%

Lumen Technologies Corporate Events

Lumen Technologies Partners with Google for Fiber Access

Lumen Technologies reported its first quarter 2025 results, highlighting progress in key areas such as operational excellence, AI backbone development, and telecom cloudification. Despite a net loss of $201 million, the company showed growth in North American business revenue and signed a significant partnership with Google for direct fiber access to Google Cloud. The adoption of Network-as-a-Service (NaaS) ports increased, supporting a shift towards a consumption-based model.

Spark’s Take on LUMN Stock

According to Spark, TipRanks’ AI Analyst, LUMN is a Neutral.

Lumen Technologies’ stock score of 47 reflects significant financial challenges, including declining revenues, high leverage, and negative net income. Technical analysis supports a bearish outlook with the stock trading below major moving averages. Valuation concerns, such as a negative P/E ratio, further weigh down the score. Despite these issues, strategic initiatives and improvements highlighted in the earnings call provide some optimism for future recovery.

To see Spark’s full report on LUMN stock, click here.

Lumen Technologies Reports Financial Improvement in 2024

For the fourth quarter and full year 2024, Lumen Technologies reported a notable improvement in financial performance, with a net income of $85 million in Q4 2024 compared to a significant net loss in the same period in 2023. The company also strengthened its balance sheet by reducing debt, increasing liquidity, and enhancing customer satisfaction across all segments. Lumen continued to make strategic advancements in building an AI backbone and expanding its network-as-a-service offerings, setting a strong foundation for future growth. Despite the improvements, the company reported a full-year net loss of $55 million, a substantial recovery from the previous year’s loss, attributed mainly to non-cash goodwill impairment charges.