Overall LUMN gets a fundamental rating of 2 out of 10. We evaluated LUMN against 37 industry peers in the Diversified Telecommunication Services industry. LUMN scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. LUMN does not seem to be growing, but still is valued expensively.

Quickly go to:

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.
In the past 5 years LUMN reported 4 times negative net income.
Each year in the past 5 years LUMN had a positive operating cash flow.

1.2 Ratios

With a Return On Assets value of -4.82%, LUMN is not doing good in the industry: 64.86% of the companies in the same industry are doing better.
LUMN's Return On Invested Capital of 0.44% is on the low side compared to the rest of the industry. LUMN is outperformed by 62.16% of its industry peers.
The Average Return On Invested Capital over the past 3 years for LUMN is below the industry average of 6.52%.

		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

LUMN's Operating Margin of 1.34% is on the low side compared to the rest of the industry. LUMN is outperformed by 62.16% of its industry peers.
In the last couple of years the Operating Margin of LUMN has declined.
With a Gross Margin value of 47.07%, LUMN perfoms like the industry average, outperforming 40.54% of the companies in the same industry.
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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LUMN is destroying value.
The number of shares outstanding for LUMN has been increased compared to 1 year ago.
Compared to 5 years ago, LUMN has less shares outstanding
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 86.49% 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.
With a decent Debt to FCF ratio value of 14.41, LUMN is doing good in the industry, outperforming 62.16% 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

WACC6.36%

2.3 Liquidity

A Current Ratio of 2.21 indicates that LUMN has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.21, LUMN belongs to the top of the industry, outperforming 86.49% of the companies in the same industry.
LUMN has a Quick Ratio of 2.17. This indicates that LUMN is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 2.17, LUMN belongs to the best of the industry, outperforming 89.19% of the companies in the same industry.

		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

The earnings per share for LUMN have decreased strongly by -22.73% in the last year.
Looking at the last year, LUMN shows a decrease in Revenue. The Revenue has decreased by -4.56% in the last year.
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

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

EPS Next Y-205.37%

EPS Next 2Y-49.27%

EPS Next 3Y-1.19%

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

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

LUMN reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
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

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LUMN indicates a somewhat cheap valuation: LUMN is cheaper than 62.16% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LUMN is valued cheaply inside the industry as 81.08% of the companies are valued more expensively.