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We feel now is a pretty good time to analyse Lumen Technologies, Inc.'s (NYSE:LUMN) business as it appears the company may be on the cusp of a considerable accomplishment. Lumen Technologies, Inc., a facilities-based technology and communications company, provides various integrated services and solutions under CenturyLink name to business and residential customers in the United States and internationally. With the latest financial year loss of US$1.2b and a trailing-twelve-month loss of US$942m, the US$14b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Lumen Technologies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Lumen Technologies is bordering on breakeven, according to the 12 American Telecom analysts. They expect the company to post a final loss in 2020, before turning a profit of US$1.8b in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of -0.6% is expected,
Underlying developments driving Lumen Technologies' growth isn’t the focus of this broad overview, but, take into account that generally a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with Lumen Technologies is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of Lumen Technologies which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Lumen Technologies, take a look at Lumen Technologies' company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
Valuation: What is Lumen Technologies worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Lumen Technologies is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lumen Technologies’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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