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Strength Seen in Lumen (LUMN): Can Its 9.1% Jump Turn into More Strength?
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Lumen (LUMN - Free Report) shares soared 9.1% in the last trading session to close at $6.14. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 42.5% gain over the past four weeks.
The increase in share price can be attributed to the launch of its cutting-edge Wavelength RapidRoutes, a faster way for enterprises to get high-capacity connections. Unlike traditional wavelength services that take months to set up, Lumen offers ready-to-deploy network paths with a 20-day delivery SLA—helping businesses scale quickly with less delay and complexity.
Additionally, last week, it announced a collaboration with Palantir Technologies to bring Palantir’s Foundry and AI Platform to Lumen. The initiative supports Lumen’s shift from traditional telecom to a next-gen tech infrastructure company, using its fiber network and digital platform to enhance operations, finance, and technology for AI-ready, multi-cloud needs. Lumen has also partnered with Pac-12 Enterprises in August to launch a new broadcasting model using its Network-as-a-Service. The partnership debuts with Washington State’s home opener against Idaho on August 30, bringing fans faster, more scalable live sports coverage.
The rising demand for Lumen's PCF solutions, amid rapid AI growth, boosts its growth trajectory. However, as Lumen moves toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to challenge top-line growth, at least in the near term. EBITDA in 2025 is expected to be below 2024 levels, due to investments in transformation, higher startup costs for PCF sales, and declines in legacy revenue.
This telecommunications is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -53.9%. Revenues are expected to be $3.04 billion, down 5.5% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Lumen, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LUMN going forward to see if this recent jump can turn into more strength down the road.
Lumen is a member of the Zacks Diversified Communication Services industry. One other stock in the same industry, Grupo Televisa (TV - Free Report) , finished the last trading session 0.7% lower at $2.78. TV has returned 21.7% over the past month.
For Grupo Televisa, the consensus EPS estimate for the upcoming report has changed +100% over the past month to $0.01. This represents a change of -85.7% from what the company reported a year ago. Grupo Televisa currently has a Zacks Rank of #4 (Sell).
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Strength Seen in Lumen (LUMN): Can Its 9.1% Jump Turn into More Strength?
Lumen (LUMN - Free Report) shares soared 9.1% in the last trading session to close at $6.14. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 42.5% gain over the past four weeks.
The increase in share price can be attributed to the launch of its cutting-edge Wavelength RapidRoutes, a faster way for enterprises to get high-capacity connections. Unlike traditional wavelength services that take months to set up, Lumen offers ready-to-deploy network paths with a 20-day delivery SLA—helping businesses scale quickly with less delay and complexity.
Additionally, last week, it announced a collaboration with Palantir Technologies to bring Palantir’s Foundry and AI Platform to Lumen. The initiative supports Lumen’s shift from traditional telecom to a next-gen tech infrastructure company, using its fiber network and digital platform to enhance operations, finance, and technology for AI-ready, multi-cloud needs. Lumen has also partnered with Pac-12 Enterprises in August to launch a new broadcasting model using its Network-as-a-Service. The partnership debuts with Washington State’s home opener against Idaho on August 30, bringing fans faster, more scalable live sports coverage.
The rising demand for Lumen's PCF solutions, amid rapid AI growth, boosts its growth trajectory. However, as Lumen moves toward newer growth products like fiber and cloud-based offerings, the secular headwinds in the legacy business will continue to challenge top-line growth, at least in the near term. EBITDA in 2025 is expected to be below 2024 levels, due to investments in transformation, higher startup costs for PCF sales, and declines in legacy revenue.
This telecommunications is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -53.9%. Revenues are expected to be $3.04 billion, down 5.5% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Lumen, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LUMN going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Lumen is a member of the Zacks Diversified Communication Services industry. One other stock in the same industry, Grupo Televisa (TV - Free Report) , finished the last trading session 0.7% lower at $2.78. TV has returned 21.7% over the past month.
For Grupo Televisa, the consensus EPS estimate for the upcoming report has changed +100% over the past month to $0.01. This represents a change of -85.7% from what the company reported a year ago. Grupo Televisa currently has a Zacks Rank of #4 (Sell).