Alcatel-Lucent is a stock priced as if it is having solvency problems. The reality is that they have as much cash on hand as long term debt, and 19B in sales. Though the risks it faces are many, this is no different from other firms in highly competitive industries. The twin moats of market share and patent portfolio should protect them. Shares have been hurt as of late because of poor forecasting of future earnings.
As mentioned above, if management can get margins in line with industry norms, the price at current valuations would be $5/share. A conservative valuation then, weighing future risks and market inefficiencies, yields a price target of $2.50/share.