The investors in Lumen Technologies, Inc.'s (NYSE:LUMN) will be rubbing their hands together with glee today, after the share price leapt 35% to US$9.02 in the week following its third-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$3.2b, statutory losses exploded to US$0.15 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the twelve analysts covering Lumen Technologies, is for revenues of US$12.3b in 2025. This implies a measurable 7.3% reduction in Lumen Technologies' revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 66% to US$0.71. Before this latest report, the consensus had been expecting revenues of US$12.4b and US$0.53 per share in losses. While next year's revenue estimates held steady, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
As a result, there was no major change to the consensus price target of US$4.99, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Lumen Technologies at US$6.83 per share, while the most bearish prices it at US$2.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 9.9% per annum 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 3.3% annually. So while a broad number of companies are forecast to grow, unfortunately Lumen Technologies is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for 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. The consensus price target held steady at US$4.99, with the latest estimates not enough to have an impact on their price targets.
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.
Before you take the next step you should know about the 2 warning signs for Lumen Technologies (1 doesn't sit too well with us!) that we have uncovered.
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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.
