Lumos Networks Is Attractive Due To Low Valuation And Even Lower Expectations
- The continued deterioration in the legacy voice/access segments and recent earnings miss drove Lumos Networks down ~50% over the past six months.
- As a result, the stock trades at a distressed multiple that implies little chance of shifting towards the strategic data segment.
- Lumos should gradually be repriced as the market recognizes it as a faster growing, high margin and emerging pure fiber play rather than a slow growth telecom.
- The continued industry consolidation at high single digit/low double digit multiples makes Lumos an attractive acquisition target.