Overall LUMN gets a fundamental rating of 2 out of 10. We evaluated LUMN against 36 industry peers in the Diversified Telecommunication Services industry. The financial health of LUMN is average, but there are quite some concerns on its profitability. LUMN is valued expensive and it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

LUMN had negative earnings in the past year.
LUMN had a positive operating cash flow in the past year.
LUMN had negative earnings in 4 of the past 5 years.
LUMN had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a Return On Assets value of -4.82%, LUMN is not doing good in the industry: 63.89% of the companies in the same industry are doing better.
With a Return On Invested Capital value of 0.44%, LUMN is not doing good in the industry: 61.11% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for LUMN is below the industry average of 6.75%.

		Industry Rank	Sector Rank
ROA	-4.82%
ROE	N/A
ROIC	0.44%

ROA(3y)-11.28%

ROA(5y)-6.48%

ROE(3y)-832.11%

ROE(5y)-498.04%

ROIC(3y)3.61%

ROIC(5y)4.58%

1.3 Margins

With a Operating Margin value of 1.34%, LUMN is not doing good in the industry: 61.11% of the companies in the same industry are doing better.
LUMN's Operating Margin has declined in the last couple of years.
The Gross Margin of LUMN (47.07%) is worse than 61.11% of its industry peers.
LUMN's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	1.34%
PM (TTM)	N/A
GM	47.07%

OM growth 3Y-44.91%

OM growth 5Y-27.05%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-4.94%

GM growth 5Y-3.18%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LUMN is destroying value.
Compared to 1 year ago, LUMN has more shares outstanding
LUMN has less shares outstanding than it did 5 years ago.
LUMN has a better debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of -0.10, we must say that LUMN is in the distress zone and has some risk of bankruptcy.
LUMN's Altman-Z score of -0.10 is on the low side compared to the rest of the industry. LUMN is outperformed by 88.89% of its industry peers.
LUMN has a debt to FCF ratio of 14.41. This is a negative value and a sign of low solvency as LUMN would need 14.41 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 14.41, LUMN is in the better half of the industry, outperforming 61.11% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	14.41
Altman-Z	-0.1

ROIC/WACC0.07

WACC6.38%

2.3 Liquidity

LUMN has a Current Ratio of 2.21. This indicates that LUMN is financially healthy and has no problem in meeting its short term obligations.
LUMN has a better Current ratio (2.21) than 86.11% of its industry peers.
A Quick Ratio of 2.17 indicates that LUMN has no problem at all paying its short term obligations.
The Quick ratio of LUMN (2.17) is better than 88.89% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.21
Quick Ratio	2.17

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

LUMN shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -22.73%.
LUMN shows a decrease in Revenue. In the last year, the revenue decreased by -4.56%.
The Revenue has been decreasing by -9.39% on average over the past years.

EPS 1Y (TTM)-22.73%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%-53.85%

Revenue 1Y (TTM)-4.56%

Revenue growth 3Y-12.68%

Revenue growth 5Y-9.39%

Sales Q2Q%-4.16%

3.2 Future

Based on estimates for the next years, LUMN will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.04% on average per year.
The Revenue is expected to decrease by -3.84% on average over the next years.

EPS Next Y-205.66%

EPS Next 2Y-50.29%

EPS Next 3Y-2.49%

EPS Next 5Y18.04%

Revenue Next Year-4.41%

Revenue Next 2Y-5.91%

Revenue Next 3Y-5.11%

Revenue Next 5Y-3.84%

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for LUMN. In the last year negative earnings were reported.
Besides the negative Price/Earnings Ratio, also the Forward Price/Earnings Ratio is negative for LUMN. No positive earnings are expected for the next year.

		Industry Rank	Sector Rank
PE	N/A
Fwd PE	N/A

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as LUMN.
77.78% of the companies in the same industry are more expensive than LUMN, based on the Price/Free Cash Flow ratio.