Lumen Technologies, Inc. LUMN will report its first-quarter 2025 results on May 1, after the market opens.
The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at a loss of 25 cents, compared with a loss of 4 cents reported in the prior year quarter. The estimate has been unchanged in the past 60 days. The consensus estimate for total revenues is pinned at $3.1 billion, implying a 5.8% year-over-year decline.
LUMN beat the Zacks Consensus Estimate for earnings in the last two quarters while missing in the remaining quarters, the average earnings surprise being 42.4%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
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What Our Model Predicts for LUMN’s Q1
Our proven model does not conclusively predict an earnings beat for Ceragon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
LUMN has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Focus on Ahead of LUMN’s Q1 Earnings
Lumen continues to witness weakness in the legacy business. In the last reported quarter, Lumen’s total revenues declined 5.3% year over year, mainly due to the negative impact of divestitures, commercial agreements, and the sale of the CDN business. Secular headwinds in the legacy business are likely to remain a strain on the top-line expansion, at least in the near term.
Lumen’s shift toward newer growth products like fiber and cloud-based offerings bodes well as it witnesses increasing demand from hyperscalers and enterprise markets. Amid the rapid proliferation of AI, Lumen's strategic investments in fiber infrastructure position it well to make the most of the growing demand for data center connectivity. In 2024, Lumen secured a total of $8.5 billion in Private Connectivity Fabric (PCF) deals. In April 2025, Lumen announced a partnership with Google Cloud at the Next 25 event. This collaboration is aimed at addressing the rising demands of enterprise customers amid the rapid expansion of AI workloads across industries. Together, Lumen and Google Cloud will deliver cutting-edge cloud and network solutions that offer the scalability, security and performance required for AI-driven digital transformation.
Higher uptake for Lumen services, particularly for Waves and IP in its large enterprise and mid-market segments, is likely to have been another tailwind. In 2024, Lumen expanded its high-speed IP service to include 400-gig ports in 14 other markets. 400-gig Waves are available in more than 70 markets. It witnessed a nearly 50% increase in 100 and 400-gig wave sales across large enterprises and mid-markets in 2024.
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Continued investments in Quantum Fiber and enterprise business are positives. Lumen anticipates witnessing healthy momentum in the Quantum business in the upcoming quarters. The company added 43,000 Quantum fiber subscribers, taking the count to one million in the reported quarter. In the last reported quarter, the company added 42,000 Quantum fiber subscribers, taking the count to 1.1 million in the reported quarter. Lumen added 105,000 Fiber broadband-enabled locations. As of Dec. 31, 2024, the total enabled locations in the retained states were 4.16 million. The company is targeting to achieve 500,000 enabled locations in 2025.
Increasing adoption of Network-as-a-Service (NaaS) solutions is also likely to have contributed to the top-line expansion in the first quarter.
Management has also been focusing on cost discipline and shutting down non-value-added processes, which are likely to have provided some support to the bottom line.
Investments in transformation, along with higher startup costs for PCF sales and legacy revenue declines, are likely to weigh on LUMN’s EBITDA performance in the first quarter. Uncertainty prevailing over global macroeconomic conditions, forex volatility and stiff competition in the AI space remain additional concerns.
LUMN Stock Plunges
LUMN shares have plunged 49.3% in the past six months. It has significantly underperformed the 11.7% decline of its Diversified Communication Services industry and the 4.9% decline of the Zacks S&P 500 composite.
Price Performance
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Lumen also underperformed some of its peers, such as Verizon Communications VZ, AT&T T, and T-Mobile US, Inc. TMUS. Verizon, AT&T and T-Mobile have registered gained 1.4%, 20.9% and 3% respectively, over the same time frame.
Key Valuation Metric for LUMN
From a valuation perspective, LUMN is trading at a massive discount. Going by its trailing 12-month price-to-sales ratio, it is trading at a multiple of 0.25 much below the Diversified Communications industry’s ratio of 1.40.
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In comparison, Verizon, AT&T and T-Mobile are trading at multiples of 1.31, 1.58 and 3.22 of compared with the Wireless National Industry’s multiple of 2.25.
LUMN’s Investment Considerations
Despite heavy debt and tough competition in the AI space, Lumen’s efforts at aligning itself with the massive growth of AI, cloud computing, and digital telecom services show promise. Increasing PCF demand and deals with tech giants are creating a strong foundation for future growth. Expansion into NaaS markets is an additional tailwind. Extensive cost cuts and discounted valuation make LUMN a compelling investment opportunity.
What to do With LUMN Stock This Earnings Season
LUMN’s performance is likely to get a boost as the company doubles down on the AI opportunity and efforts to pay down debt. Cost efficiency is expected to cushion bottom line. Deeply discounted valuation makes LUMN stock worth investment.
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