A Look at Lumen Technologies’s Valuation Following Its Major AI Partnership With Palantir Technologies

Lumen Technologies (NYSE:LUMN) is making a decisive move to speed up its shift into digital infrastructure by entering a multi-year, multi-million-dollar partnership with Palantir Technologies. This collaboration brings advanced AI software deeper into Lumen’s high-performance network. The goal is to drive enterprise transformation and position the company for new opportunities in the AI era.

See our latest analysis for Lumen Technologies.

Lumen Technologies’ bold AI push arrives at a time of strong momentum for its shares. Its share price has soared by 42.9% over the past month and 86.8% in the last 90 days, with the 1-year total shareholder return now at 25.6%. The swift rally suggests investors are warming to Lumen’s strategic shift as the company pivots from declining legacy revenues toward tech-driven growth.

If you’re watching Lumen’s transformation and want to see what else is taking off in the tech and AI space, now’s the perfect moment to explore See the full list for free.

With Lumen shares surging and investor optimism running high, the key question now is whether the recent rally leaves further upside on the table, or if future growth has already been fully priced in.

Most Popular Narrative: 55.6% Overvalued

Lumen Technologies’ most popular valuation narrative assigns a fair value of $5.20 per share, which is well below the last close of $8.09. This suggests that high expectations may already be included in the price, with very little upside implied by consensus projections.

“Growing adoption of Lumen's Network-as-a-Service (NaaS) and digital platform by enterprise customers, combined with upcoming integrations into major cloud and tech solution marketplaces, expands commercial reach and improves network utilization. This supports future revenue acceleration and operating leverage.”

Read the complete narrative.

Want to know what growth projections justify this price? Discover the profit assumptions, expected margin swing, and future multiple that could move the needle. The numbers behind this narrative may surprise anyone tracking Lumen’s bold transformation story.

Result: Fair Value of $5.20 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent declines in legacy revenues and Lumen’s heavy debt burden could still challenge the pace and stability of its ambitious digital transformation.

Find out about the key risks to this Lumen Technologies narrative.

Another View: Multiples Send a Different Signal

While the popular narrative sees Lumen Technologies as overvalued, a look at price-to-sales tells a different story. At just 0.6 times sales, Lumen’s ratio is half the US Telecom industry average and well below the peer average of 6.1x. It is also lower than the fair ratio of 1x, indicating the market is pricing in significant risk but potentially overlooking upside if the company stabilizes or returns to any growth path.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Lumen Technologies Narrative

If you have your own take or want to dig into the numbers and trends directly, crafting your personal Lumen Technologies narrative takes less than three minutes. Do it your way

A great starting point for your Lumen Technologies research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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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