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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Lumen Technologies, Inc. (XNYS:LUMN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
LUMN
Name:
LUMEN TECHNOLOGIES, INC. (XNYS:LUMN)
Sector:
798.00M
Industry:
Telecom Services
CEO:
Mr. Jeffrey K. Storey
Total Employees:
35,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -27.58% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF LUMEN TECHNOLOGIES, INC.(LUMN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TELECOM SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
9.85
One Month Price Target:
$9.9
Six Month Price Target :
$10.17
Likely Price in One Year's Time:
Ticker:
$10.49
Likely Trading Range Today Under (Normal Volatility)
$9.8
Price Upper limit ($) :
$9.9
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$9.22
This week:
$8.45
This month :
$7.05
Other Primary facts
Market Cap:
10.01B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
1.04B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
28.09%
-22.46%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$12.76
$11.44
$6.94
$8.26
Medium risk (<10%) entry points
Buy Call
Sell Call
$11.01
Buy Put:
Sell Put:
$10.73
$8.69
$8.97
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
LUMN
Sharpe Ratio:
-0.40%
Comparison:
LUMN, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -140.78% lower than the industry
& is -117.40% lower than the market/S&P 500 average
Average Returns/Yield of
LUMN
Daily returns:
0.00%
Weekly returns:
-0.02%
Monthly returns:
-0.07%
Yearly returns:
17.77%
Comparison of returns:
Average annual returns/yield (last 3 years) is -104.62% below industry average
Classification:
LUMN, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.9
Statistical test of Returns:
LUMN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.09%
Weekly Volatility:
6.92%
Monthly Volatility:
13.84%
Yearly Volatility:
47.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.59%
Volatility in last five trading days has been -48.58% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.36%
Weekly VaR:
-14.22%
Monthly VaR:
-28.43%
How Much Can the price of
LUMN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$7.37
This translates to price declining to:
$1.48
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
LUMN is a 100.68% riskier investment compared to the market/S&P 500 & is 71.92% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -9.21% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
LUMN
Beta in relation to market/S&P 500--0.97
Expected beta in 1 year's time:
0.911
Expected beta in 3 year's time:
1.289
Unlevered (debt free) Beta:
0.354
Beta in relation to Nasdaq (XNAS):
0.622
Beta in relation to all global stocks::
0.786
Beta Comparison & Analysis
Beta of competitors/peers::
0.774
Beta is 25.20% higher than peers
Average Industry Beta:
0.819
Beta is 18.35% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.106
Alpha is -217.66% below industry average alpha yield
Alpha is -675% below the market average
Analysis of Cost of Capital of
LUMN
Equity cost of capital:
0.098
Equity cost of capital is 11.75% above industry mean WACC
Unlevered (without debt) cost of capital:
3.57%
Before-tax cost of debt:
5.13%
After-tax cost of debt:
4.05%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.05%
WACC is 23.68% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.67
Revenue growth rate per share of (3Y):
0.83
Annual revenue growth rate is -104.01% below industry average
EPS:
$2.06
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$3.52
Balance sheet equity growth per share: -52.82%
Equity growth rate per share is 232.02% higher than the industry
Debt per share
$27.43
EBITDA per share
$7.76
Valuation Analysis Today of
LUMN
P/E Ratio:
5.08
P/E Ratio of Competitors/Peers:
12.04
P/E ratio is -57.77% lower than main peers & is -82.77% lower than the industry
Stock price/value with industry average P/E ratio: $60.79
LUMN is -83.80% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $26.17
Present value of the expected future dividends only: $10.22
P/S (Price to Sales ratio):
0.53
Price to sales ratio is -91.57% below the industry mean
P/B (Price to book value ratio):
0.83
Price to free cash flow: 2.79
-
Net income growth rate (3Y):
-217.73%
Net income growth rate is -153.50% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 12.56%
Dividend yeild: 10.15%
Previous Dividend: $0.25
Previous adjusted dividend: $0.25
Previous Dividend: $1.00
-
-
Average dividend payment (long-term): $0.25
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 17/08/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 19/05/2022
Dividend History:
2022-05-27--$0.25
2021-11-26--$0.25
2021-05-28--$0.25
2022-03-07--$0.25
2021-08-27--$0.25
2021-03-05--$0.25
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
231.21%
Net debt to equity ratio:
232.62%
Debt to assets ratio:
48.93%
Net debt to assets ratio:
49.23%
Debt-to-asset ratio is -36.00% below industry average
Ability to repay debt:
Interest coverage ratio:
5.41
Interest coverage ratio is 244.53% more than industry average
Looking forward:
Debt growth rate:
-8.84%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.93%
Analysis of Key Statistics
Correlation of price movement with the market:
0.47
Statistical significance of correlation:
LUMN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.461
Stock price is 1.85% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.461
Correlation of price movement with Nasdaq (^IXIC):
0.028
Covariance of price movement with the market:
0.05
Kurtosis
16.293
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.366
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
LUMN
Gross Profit Margin Ratio:
228%
Operating Profit Margin Ratio:
22.66%
Operating profit margin is 624.00% higher than the industry
Net Profit Margin Ratio:
228%
Effective Tax Rate:
24.84%
Effective tax rate is -23.03% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
17.56%
Return on equity (ROE) is -557.36% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.72%
Return on assets (ROA) is -2139.30% lower than the industry
Financial Leverage:
2.0x
Current Ratio:
2.08
Current ratio is 28.92% above industry average
Cash Conversion Cycle (days):
-4
Cash conversion cycle is -105.61% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
1.07%
In-depth Efficiency Analysis
Revenue generated per employee:
552.4K
Each employee generates -45% less revenue than industry average revenue per employee
EBITDA generated per employee:
229.5K
Each employee generates -33% less EBITDA than industry average revenue per employee
Profit generated per employee:
61.6K
Each employee generates -41% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
22.8K
Each employee generates -60% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.3M
Each employee generates -60% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
LUMN
Shaw Communications Inc. (XNYS:SJR)
WPP PLC (XNYS:WPP)
Telefonica Brasil SA (XNYS:VIV)
LIVE NATION ENTERTAINMENT, INC. (XNYS:LYV)
THE INTERPUBLIC GROUP OF COMPANIES, INC. (XNYS:IPG)
OMNICOM GROUP INC. (XNYS:OMC)
AUTOHOME INC. (XNYS:ATHM)
SK TELECOM CO.,LTD (XNYS:SKM)
CABLE ONE, INC. (XNYS:CABO)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
19.33B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
8.34B
11.00B
-
654.00M
2.94B
-
3.68B
6.62B
-
1.49B
3.68B
8.03B
4.38B
2.16B
2.87B
713.00M
2.16B
Statement of Cash Flow
Date:
Period:
808.00M
Differed Income Tax :
179.00M
Stock Based Compensation :
23.00M
Change in Working Capital :
- 234000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
1.38B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/22/22
2022
Q1
366.00M
-
366.00M
1.42B
-
9.99B
11.77B
20.83B
15.98B
6.79B
-
-
2.68B
46.27B
-
58.04B
902.00M
539.00M
244.00M
642.00M
3.57B
5.66B
28.40B
7.48B
40.10B
-
45.76B
1.03B
- 5399000.00K
- 2047000.0K
18.70B
January 22, 2022 at 7:00:00 AM
14.95B
12.28B
58.04B
-
28.94B
28.6B
-
- 569000.00K
- 569000.00K
- 1474000.00K
-
-
- 271000.00K
969.00M
- 776000.00K
-
30.00M
439.00M
409.00M
1.38B
- 577000.00K
798.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
LUMN
2023
2024
2025
2026
2027
$10.54
$16.37
$17.44
$18.58
$19.79