It's been a pretty great week for Lumen Technologies, Inc. (NYSE:LUMN) shareholders, with its shares surging 19% to US$1.45 in the week since its latest full-year results. Revenues were in line with expectations, at US$15b, while statutory losses ballooned to US$10.48 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the nine analysts covering Lumen Technologies provided consensus estimates of US$13.4b revenue in 2024, which would reflect a noticeable 8.0% decline over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 99% to US$0.15. Before this latest report, the consensus had been expecting revenues of US$13.4b and US$0.21 per share in losses. Although the revenue estimates have not really changed Lumen Technologies'future looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.
The consensus price target fell 7.8% to US$1.77despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lumen Technologies analyst has a price target of US$3.50 per share, while the most pessimistic values it at US$1.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would also point out that the forecast 8.0% annualised revenue decline to the end of 2024 is roughly in line with the historical trend, which saw revenues shrink 7.9% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 2.0% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Lumen Technologies to suffer worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lumen Technologies analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Lumen Technologies you should know about.
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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.