Latest news with #PrivateConnectivityFabric
Yahoo
20-05-2025
- Business
- Yahoo
Lumen Surges 30% in a Month: Where Will the Stock Head From Here?
Lumen Technologies, Inc.'s LUMN shares have surged 29.6% in the past month, outpacing the S&P 500 composite and Diversified Communications Services sector's growth of 15.4% and 6.3%, respectively. Lumen also outperformed some of its peers, such as Verizon Communications VZ, AT&T T, and T-Mobile US, Inc. TMUS. Verizon and AT&T have registered gains of 3.2% and 6.4% respectively, while T-Mobile has lost 3.7% over the same time frame. Image Source: Zacks Investment Research Closing at $3.98 as of yesterday's trading session, LUMN stock is currently trading way below its 52-week high of $10.33. With a significant pullback, investors are likely to contemplate the stock's growth trajectory. Will the company's efforts to capitalize on the fiber opportunity bear fruit and propel the stock upwards? Should investors stay invested or make an exit? Let us analyze the stock in detail to ascertain if it is worth investment consideration. Increasing demand for Lumen's Private Connectivity Fabric ('PCF') solutions amid rapid AI proliferation is emerging as an encouraging development. Lumen has secured a total of $8.5 billion in PCF deals in 2024. As AI needs surge, large companies across various industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. Lumen has inked deals with various tech giants like Microsoft, Amazon, Google Cloud and Meta Platforms to provide the network capabilities for AI innovation. On the last earnings call, Lumen added that it continues to see overall PCF demand for both large deal CST levels and at the smaller enterprise deal level. Increasing demand for Lumen services, particularly for Waves and IP in its large enterprise and mid-market segments, remains a highlight. Investments in PCF are expected to create revenue streams and strengthen Lumen's position as a relevant infrastructure player going ahead. The company also remains focused on 'cloudifying' telecom and driving the adoption of its network-as-a-service (NaaS) solutions. Lumen's strong network capabilities, integrated hosting and network solutions are likely to promote growth in the cloud business. Its managed and cloud services are key differentiators from other players in the market. Lumen highlighted that it has more than 500 customers currently using NaaS services in 2024. Some of its NaaS solutions with private connections include Lumen Ethernet On-Demand and Lumen IP-VPN (Internet Protocol Virtual Private Network) On-Demand. These solutions are designed to provide users with private cloud connections and augmented data safety and security. Lumen has introduced the Lumen Cloud Communications platform, a next-gen unified communications solution to gain a larger share of a $47 billion and growing cloud voice total addressable market. Lumen Technologies, Inc. price-consensus-eps-surprise-chart | Lumen Technologies, Inc. Quote Lumen continues to progress with its turnaround and is striving to boost operational efficiency. The company is anticipating $1 billion in cost savings by the end of 2027 through planned infrastructure simplification across the network, product portfolio and IT. It is looking to integrate the network across all four different architectures by engineering them into one simplified, standardized network fabric. This integration will also aid in product portfolio simplification. It has also been leveraging AI tech to drive intelligence and automation. Management expects to significantly reduce the product count from thousands of product codes to a target of nearly 300. In the current year, it expects more than 250 million of run-rate cost benefit. From a valuation perspective, LUMN is trading at a massive discount. Going by its trailing 12-month price-to-sales ratio, LUMN is trading at a multiple of 0.3, much below the Technology Services industry's ratio of 1.47. Image Source: Zacks Investment Research In comparison, Verizon, AT&T and T-Mobile are trading at multiples of 1.38, 1.65 and 3.38 of compared with the Wireless National Industry's multiple of 2.35. Lumen continues to witness weakness in the legacy business. In the first quarter of 2025, Lumen's total revenues declined 3.3% year over year to $3,182 million. As Lumen shifts toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to prove a strain on the top-line expansion at least in the near term. For 2025, Lumen continues to expect adjusted EBITDA in the band of $3.2-$3.4 billion and capital expenditures to be between $4.1 billion and $4.3 billion. EBITDA in 2025 is expected to be below the levels of 2024, owing to the investments in transformation, along with higher startup costs for PCF sales and legacy revenue declines. Lumen expects EBITDA to significantly rebound in 2026 and be more than $3.5 billion. It also anticipates that the metric will register growth thereafter. Free cash flow is expected to be between $700 million and $900 million. Management added that free cash flow would be lumpy from quarter to quarter as it moves through the PCF builds. Lumen has a very debt-heavy balance sheet. As of March 31, 2024, the company had $1.9 billion in cash and cash equivalents with $17.334 billion of long-term debt compared with the respective figures of $1.889 billion and $17.494 billion as of Dec. 31, 2024. Moreover, focus on AI and cloudifying telecom is a positive, but these markets are rife with heavy competition, which could be a serious impediment to the top-line expansion for Lumen. Analysts remain bearish as reflected in the downward estimate revision for the current year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Image Source: Zacks Investment Research Lumen is navigating a transformative period, aligning itself with the massive growth of AI, cloud computing and digital-telecom services. Increasing PCF demand and deals with tech giants are creating a strong foundation for growth. Expansion into NaaS markets is an additional tailwind. Extensive cost cuts and discounted valuation make LUMN a compelling investment opportunity. However, near-term pressure from legacy business decline, heavy debt load and competitive risks remains concerning. While long-term prospects are promising, execution risks persist. Given the mixed picture, it might not be a prudent investment decision to bet on the stock at the moment, which carries a Zacks Rank #3 (Hold). For long term investors, staying invested seems prudent as long term prospects remain intact. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T) : Free Stock Analysis Report Verizon Communications Inc. (VZ) : Free Stock Analysis Report T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report Lumen Technologies, Inc. (LUMN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
19-03-2025
- Business
- Associated Press
New Fiber Broadband Association Report: AI's Future Hinges on Fiber Broadband
The Fiber Broadband Association (FBA) today released a groundbreaking report, Accelerating AI with Fiber: Systems and Strategies, highlighting fiber broadband as the foundation for AI-driven innovations across data centers, networks, and smart home applications. To create the report, FBA engaged with advisory firm Entropy, Inc., to study the impact of AI and fiber. The research simply reveals that AI needs data, data needs data centers, and data centers need fiber connectivity. As AI reshapes industries and drives skyrocketing data demands, the report underscores fiber broadband's critical role in delivering the ultra-fast speeds, low latency, and high-capacity infrastructure necessary to sustain AI's exponential growth. Without fiber, AI-powered advancements ranging from real-time cloud computing to autonomous systems will be limited by network constraints. The report highlights fiber's critical role across three key areas of AI-drive innovation: AI Data Centers: AI applications and deep learning models require vast amounts of data processing which fiber makes possible by ensuring seamless, high-speed connectivity between processors, GPUs, and cloud storage. AI's reliance on real-time, high-performance computing makes fiber indispensable to the modern data center. AI Fiber Networks: As AI advances, networks are evolving with AI-powered automation to manage bandwidth, enhance efficiency, and ensure low-latency performance. Fiber networks are being architected to support AI-ready infrastructures, accelerating edge computing, cloud connectivity, and real-time decision-making. AI Fiber Homes: AI-powered homes are emerging, where fiber connectivity enables Persistent Contextual Hyper Personalization (PCHP)- an AI-driven experience that adapts and learns from user behavior. This unlocks seamless telehealth, immersive gaming, and AI-led education, ensuring users receive hyper-personalized, real-time digital experiences. 'AI is only as powerful as the network that supports it,' said Gary Bolton, President, and CEO of the Fiber Broadband Association. 'Fiber is the only broadband technology capable of delivering the speed, scalability, and reliability AI requires- from hyperscale data centers to smart homes. This report demonstrates why fiber is the backbone of the AI revolution.' Fiber broadband is more than just an enabler of AI- it is the infrastructure that will determine AI's success. The report emphasizes that today's networks cannot fully support the massive growth in AI applications, which require increased fiber density, expanded middle-mile infrastructure, and next generation fiber networks. AI's future depends on a fiber-powered ecosystem capable of supporting trillions of transactions, cloud-based learning models, and the integration of AI across industries including healthcare, logistics, retail, and IoT. The report also highlights real-world examples of AI and fiber convergence, including Lumen's Private Connectivity Fabric, Adtran's middle-mile optimization, and Calix's AI-driven operations cloud. Access the full report, Accelerating AI with Fiber: Systems and Strategies, here and stay updated by subscribing to the Fiber Broadband Association's weekly newsletter here. About the Fiber Broadband Association The Fiber Broadband Association is the largest and only trade association that represents the complete fiber ecosystem of service providers, manufacturers, industry experts, and deployment specialists dedicated to the advancement of fiber broadband deployment and the pursuit of a world where communications are limitless, advancing quality of life and digital equity anywhere and everywhere. The Fiber Broadband Association helps providers, communities, and policy makers make informed decisions about how, where, and why to build better fiber broadband networks. Since 2001, these companies, organizations, and members have worked with communities and consumers in mind to build the critical infrastructure that provides the economic and societal benefits that only fiber can deliver. The Fiber Broadband Association is part of the Fibre Council Global Alliance, which is a platform of six global FTTH Councils in North America, LATAM, Europe, MEA, APAC, and South Africa. Learn more at SOURCE: Fiber Broadband Association Copyright Business Wire 2025. PUB: 03/19/2025 09:00 AM/DISC: 03/19/2025 09:02 AM
Yahoo
23-02-2025
- Business
- Yahoo
Why Lumen Stock Fell Today After First Posting Big Gains
Lumen (NYSE: LUMN) stock ended Friday's trading in the red despite posting big gains early in the session. The telecommunications company's share price ended the day down 0.5%, even though it had been up as much as 7.9%. Lumen got a big valuation boost early in today's trading thanks to an analyst's ratings upgrade, but it couldn't hold on to the gains. The stock moved lower as the day progressed and investors weighed macroeconomic indicators signaling emerging risk factors. Before the market opened this morning, Wells Fargo published new coverage of Lumen. Eric Luebchow, the firm's lead analyst on the company, raised his rating from underweight to equal weight and maintained a one-year price target of $5 per share. As of this writing, Luebchow's price target suggests upside potential of roughly 7%. The analyst thinks the sale of the company's Quantum Fiber division and new contract wins for Private Connectivity Fabric offerings could help improve the company's debt position and generate new free cash flow. Despite big gains early in trading, shares retreated as macroeconomic risk factors increasingly shaped market action. Today saw the release of a new batch of data for the U.S. economy, and most of the indicators pointed in a bearish direction. Tracking from the University of Michigan showed that consumer confidence weakened in January, and existing home sales saw a bigger-than-expected decline in the month. Tracking from S&P Global also showed weaker-than-anticipated performance for the manufacturing and service sectors this month. With today's pullback, Lumen stock is now down roughly 12% across 2025's trading. On the other hand, the company's share price has risen by more than 200% over the last year. The big gains have largely been powered by sales of the company's Private Connectivity Fabric technologies, with Microsoft and Meta Platforms making purchases from the company to support their artificial intelligence (AI) data center initiatives. Poor performance in other areas of the business, combined with a high debt load, continues to make Lumen a risky stock. However, the emergence of AI-related sales catalysts suggests significant upside potential if the business continues to score contracts for Private Connectivity Fabric. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $363,307!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $46,607!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $552,526!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of February 21, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Why Lumen Stock Fell Today After First Posting Big Gains was originally published by The Motley Fool Sign in to access your portfolio
