Complete LUMN Stock Valuation Analysis
Comprehensive intrinsic value analysis using 2 different methodologies
LUMN DCF Analysis
LUMN (Lumen Technologies, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $17.5B | $14.6B | $13.1B | $11.8B | $10.6B | $9.6B | $8.8B | $8.1B |
| Revenue Growth % | - | -16.7% | -10.0% | -10.0% | -10.0% | -9.5% | -8.6% | -7.7% |
| EBIT | $3.5B | $-9.6B | $460.0M | $589.9M | $530.9M | $480.4M | $439.3M | $405.5M |
| EBIT Margin % | 20.2% | -65.8% | 3.5% | 5.0% | 5.0% | 5.0% | 5.0% | 5.0% |
| Tax Rate % | 25.0% | 25.0% | 25.0% | 24.9% | 25.0% | 25.0% | 25.0% | 25.0% |
| NOPAT | $2.7B | $-7.2B | $345.0M | $442.7M | $398.4M | $360.5M | $329.7M | $304.3M |
| NOPAT Margin % | 15.2% | -49.4% | 2.6% | 3.8% | 3.8% | 3.8% | 3.8% | 3.8% |
| Capex | $3.0B | $3.1B | $3.2B | $2.0B | $1.7B | $1.4B | $1.3B | $1.1B |
| Capex / Revenue % | 17.3% | 21.3% | 24.6% | 16.7% | 15.8% | 15.0% | 14.3% | 13.6% |
| Depreciation | $3.2B | $3.0B | $3.0B | $2.4B | $2.2B | $2.0B | $1.8B | $1.7B |
| D&A / Revenue % | 18.5% | 20.5% | 22.6% | 20.5% | 20.5% | 20.5% | 20.5% | 20.5% |
| Change in NWC | $-3.8B | $624.0M | $-486.0M | $22.8M | $16.4M | $11.9M | $8.7M | $6.4M |
| NWC Change / Revenue % | -21.5% | 4.3% | -3.7% | 0.2% | 0.2% | 0.1% | 0.1% | 0.1% |
| Unlevered FCF | $6.6B | $-7.9B | $556.0M | $876.0M | $881.0M | $876.2M | $869.5M | $862.0M |
| UFCF % Chg. | - | -219.6% | 107.0% | 57.6% | 0.6% | -0.5% | -0.8% | -0.9% |
| FCF / Revenue % | 37.9% | -54.5% | 4.2% | 7.4% | 8.3% | 9.1% | 9.9% | 10.6% |
| Discount Factor | - | - | - | 0.945 | 0.893 | 0.843 | 0.797 | 0.753 |
| Present Value of FCF | - | - | - | $827.7M | $786.5M | $739.1M | $692.9M | $649.1M |
| Sum of PV of UFCF | - | - | - | $827.7M | $1.6B | $2.4B | $3.0B | $3.7B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 6.5% |
| Tax Rate | 24.9% |
| After Tax Cost of Debt | 4.8% |
| Risk Free Rate | 4.46% |
| Market Risk Premium | 4.3% |
| Beta | 1.31 |
| Cost of Equity | 10.1% |
| Total Debt | $18.2B |
| Market Cap | $4.2B |
| Total Capital | $22.3B |
| Debt Weighting | 81.3% |
| Equity Weighting | 18.7% |
| WACC | 5.8% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $862.0M |
| Terminal Value | $26.5B |
| PV of Terminal Value | $19.9B |
| Cumulative PV of UFCF | $3.7B |
| Net Debt | $16.3B |
| Equity Value | $7.4B |
| Shares Outstanding | 987.7M |
| Implied Share Price | $7 |
| Current Share Price | $4 |
| Implied Upside/(Downside) | +83.1% |
Valuation Summary
$7.45
Implied Price
$4.07
Current Price
+83.1%
Upside/Downside
5.8%
WACC
LUMN Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 8 peer companies in Communication Services
P/E Ratio
$-7.37
-281.2%
Peer Median: 23.4x
EV/EBITDA
$86.27
+2019.7%
Peer Median: 23.5x
P/S Ratio
$28.93
+610.8%
Peer Median: 2.3x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for LUMN's business model and current situation.
Multiple Comparison
| Multiple | LUMN Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | -12.9x | 23.4x | 13.7x | -155.2% | Undervalued |
| EV/EBITDA | 5.4x | 23.5x | 19.6x | -76.9% | Undervalued |
| P/S Ratio | 0.3x | 2.3x | 2.7x | -85.9% | Undervalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $8.32B | 0.0x | 0.0x | 1794.6x | |
| $4.18B | 4.1x | 5.4x | 0.3x | |
| $2.82B | 23.4x | 10.7x | 3.3x | |
| $2.32B | 0.0x | 23.7x | 2.3x | |
| $2.40B | 0.0x | 36.5x | 9.4x | |
| $1.01B | 0.0x | 17.7x | 0.2x | |
| $0.50B | 0.0x | 0.0x | 84.8x | |
| $0.43B | 0.0x | 23.5x | 0.6x |