Lumen Technologies (LUMN) Faces Deeper Losses—Is Its Turnaround Story Losing Credibility?

• Lumen Technologies recently reported second quarter 2025 earnings, revealing a drop in sales to US$3.09 billion and a net loss of US$915 million, alongside a US$628 million goodwill impairment charge and guidance projecting another year of significant losses.
• These developments mark a major shift in the company's financial trajectory, as the scale of the net loss and impairment far exceeds prior periods and signals growing concerns regarding operational and balance sheet challenges.
• We'll assess how the large goodwill impairment and deepening net losses challenge the company's earlier investment narrative focused on transformation and margin recovery.

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Lumen Technologies Investment Narrative Recap

Being a Lumen Technologies shareholder often means believing in the company’s ability to turn around its business by capturing long-term growth from enterprise and fiber network services, despite ongoing declines in legacy revenue. However, the latest quarterly results, with a steep net loss and a US$628 million goodwill impairment, directly challenge the notion of an imminent transformation and keep margin pressure and debt risk at the forefront for now; this materially impacts the short-term catalyst of operational recovery and shifts the primary risk to the company’s financial stability.

The most relevant recent announcement is the new earnings guidance projecting a full-year net loss between US$650 million and US$1,455 million, highlighting management’s expectation of continued financial struggles. This guidance underscores the strain on cash flow, balance sheet strength, and the company’s ability to fund essential investments in growth areas like AI-driven fiber and digital network services.

On the flip side, investors must watch for the impact of Lumen’s large debt load on near-term financial flexibility and long-term viability...

Read the full narrative on Lumen Technologies (it's free!)

Lumen Technologies' outlook forecasts $11.4 billion in revenue and $1.4 billion in earnings by 2028. This scenario assumes a 3.9% annual revenue decline and a $2.6 billion increase in earnings from current levels of -$1.2 billion.

Uncover how Lumen Technologies' forecasts yield a $4.92 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 12 distinct fair value estimates for Lumen, ranging from US$0.58 to US$17.09 per share. While views are wide, the deepening net losses now place even more emphasis on the company’s ability to offset legacy business decline with new enterprise growth, prompting you to consider the full spectrum of opinions before making any decisions.

Explore 12 other fair value estimates on Lumen Technologies - why the stock might be worth less than half the current price!

Build Your Own Lumen Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Lumen Technologies research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Lumen Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lumen Technologies' overall financial health at a glance.

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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.

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