Lumen Technologies Inc. is an investment holding company, which engages in the provision of integrated communications to residential and business customers. It operates through the following segments: International and Global Accounts Management; Enterprise; Small and Medium Business; Wholesale and Consumer. The International and Global Accounts Management segment includes three operating regions: Europe Middle East and Africa, Latin America and Asia. The Enterprise segment provides products and services to large and regional domestic and global enterprises, as well as the public sector, which includes the U.S. Federal Government, state and local governments and research and education institutions. The Small and Medium Business segment products and services to small and medium businesses directly and through indirect channel partners. The Wholesale segment provide products and services to a range of other communication providers across the wireline, wireless, cable, voice and data center sectors. The Consumer Segment provides products and services to residential customers.
LUMN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Centurylink Inc. To summarize, we found that Centurylink Inc ranked in the 74th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 275.83% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for LUMN, they are:
26% of the company's capital comes from equity, which is greater than only 8.36% of stocks in our cash flow based forecasting set.
Centurylink Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 1.54% of tickers in our DCF set.
Relative to other stocks in its sector (Communication Services), Centurylink Inc has a reliance on debt greater than 79.86% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Communication Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as LUMN, try T, ATUS, CNSL, RBBN, and CHU.