AI won’t kill Lumine Group, this analyst says

Desjardins Securities analyst Jerome Dubreuil raised his target price on Lumine Group (Lumine Group Stock Quote, Chart, News, Analysts, Financials TSXV:LMN) to $39.00 from $36.00 following what he described as a strong fourth quarter. He maintained a “Buy” rating on the shares. The Street average target stands at $40.50.

As reported by the Globe and Mail, in a March 4 note, Dubreuil said Lumine delivered a “solid quarter” with beats on revenue, EBITDA and free cash flow available to shareholders.

“We do not see AI easily disrupting Lumine because Tier-1 telecom companies (Lumine’s most important clients) rely on highly customized, ultra-reliable core systems with long, restrictive vendor cycles,” he said. “This makes rapid displacement unlikely, but does not preclude Lumine from leveraging AI internally.”

“Lumine reported a solid quarter, with beats on revenue, EBITDA and FCFA2S,” he said. “EBITDA grew 27% year-over-year and FCFA2S grew 48% in 4Q25 before the Synchronoss numbers even started contributing to Lumine’s results.”

Dubreuil also pushed back on concerns that artificial intelligence could disrupt Lumine’s business model.

“We do not see AI easily disrupting Lumine because Tier-1 telecom companies (Lumine’s most important clients) rely on highly customized, ultra-reliable core systems with long, restrictive vendor cycles,” he said. “This makes rapid displacement unlikely, but does not preclude Lumine from leveraging AI internally.”

Lumine reported fourth-quarter revenue of $216.3-million, up 16% from $187.1-million a year earlier, including about 1% organic growth after adjusting for foreign exchange impacts. Operating income increased 29% to $88.4-million, while net income rose 69% to $49.6-million.

Cash flow from operations climbed 34% to $71.4-million, and free cash flow available to shareholders rose 48% year-over-year to $67.1-million.

For the full year, Lumine generated revenue of $765.7-million, up 15% from $668.4-million in 2024. Operating income increased 31% to $275.7-million, while the company reported net income of $118.8-million compared with a net loss of $258.9-million in the prior year.

Cash flow from operations more than doubled to $236.5-million from $115.0-million in 2024, while free cash flow available to shareholders surged 153% to $217.0-million.

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