As of June 1, 2025, Lumen Technologies Inc has a Discounted Cash Flow (DCF) derived fair value of $6.62 per share. With the current market price at $3.92, this represents a potential upside of 68.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $4.81 |
| DCF Fair Value (10-year) | $6.62 |
| Potential Upside (5-year) | 22.6% |
| Potential Upside (10-year) | 68.9% |
| Discount Rate (WACC) | 4.8% - 18.0% |
Revenue is projected to grow from $13108 million in 12-2024 to $16351 million by 12-2034, representing a compound annual growth rate of approximately 2.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 13108 | 10% |
| 12-2025 | 12678 | -3% |
| 12-2026 | 13045 | 3% |
| 12-2027 | 13534 | 4% |
| 12-2028 | 13805 | 2% |
| 12-2029 | 14081 | 2% |
| 12-2030 | 14459 | 3% |
| 12-2031 | 14967 | 4% |
| 12-2032 | 15639 | 4% |
| 12-2033 | 16031 | 3% |
| 12-2034 | 16351 | 2% |
Net profit margin is expected to improve from 0% in 12-2024 to 9% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (55) | 0% |
| 12-2025 | 74 | 1% |
| 12-2026 | 308 | 2% |
| 12-2027 | 547 | 4% |
| 12-2028 | 779 | 6% |
| 12-2029 | 1009 | 7% |
| 12-2030 | 1078 | 7% |
| 12-2031 | 1158 | 8% |
| 12-2032 | 1254 | 8% |
| 12-2033 | 1331 | 8% |
| 12-2034 | 1403 | 9% |
with a 5-year average of $3195 million. Projected CapEx is expected to maintain at approximately 19% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 2936 |
| 12-2026 | 2856 |
| 12-2027 | 2773 |
| 12-2028 | 2682 |
| 12-2029 | 2577 |
| 12-2030 | 2645 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 29 |
| Days Inventory | 10 |
| Days Payables | 49 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 3064 | 21 | 1824 | (148) | 1367 |
| 2026 | 4356 | 114 | 2503 | 65 | 1674 |
| 2027 | 4640 | 202 | 2597 | 105 | 1737 |
| 2028 | 4890 | 288 | 2649 | (3) | 1957 |
| 2029 | 5122 | 373 | 2702 | 53 | 1994 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 4.81 | 22.6% |
| 10-Year DCF (Growth) | 6.62 | 68.9% |
| 5-Year DCF (EBITDA) | 17.19 | 338.6% |
| 10-Year DCF (EBITDA) | 15.12 | 285.6% |
Is Lumen Technologies Inc (LUMN) a buy or a sell? Lumen Technologies Inc is definitely a buy. Based on our DCF analysis, Lumen Technologies Inc (LUMN) appears to be significantly undervalued with upside potential of 68.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $3.92.