Lucent: Diamond in the Rough or Lump of Coal?

What's Lucent Technologies(LU Quote) worth? That's an important question to the millions of investors who own the stock and are wondering whether to hold or dump their shares. Thanks to its former ties with AT&T(T Quote), Lucent is still one of the most widely owned U.S. equities. And it's important to millions of other investors who are trying to figure out if this is a potentially profitable value play or a stock to avoid at any price.

You can find just about any number you want on Lucent's value -- which is, of course, no help at all. On Wall Street, 16 analysts rate the stock a buy, one gives it a sell and 15 call it a hold, whatever that means. I've found a target price as high as $30 a share from Banc of America Securities, and yet Alcatel, which got to know the inside dirt on Lucent while negotiating to buy the company, decided $6.90 a share was too much to pay without clear control of the joint board of directors. The stock market, on the other hand, pushed the shares up to $8.54 on June 5 on news that the soon-to-close June quarter wasn't going to be any more of a disaster than expected.

Before I add more numbers to the soup, let me try to explain why the numbers are so confusing right now. Currently, I think it's possible to put a target price on Lucent as either a value stock or a growth stock -- and the two methods focus on very different questions about Lucent's future and produce radically different prices for the shares. ...