Lumentum Holdings (LITE) AI Stock Analysis

• Market Cap: $22.71B
• Dividend Yield: N/A
• Average Volume (3M): 5.21M
• Price to Earnings (P/E): 225.4
• Beta (1Y): 2.56
• Revenue Growth: 33.62%
• EPS Growth: N/A
• Country: US
• Employees: 7,257
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 1.10
• Shares Outstanding: 70,900,000
• 10 Day Avg. Volume: 4,418,412
• 30 Day Avg. Volume: 5,209,789
• PEG Ratio: -2.41
• Price to Book (P/B): 5.76
• Price to Sales (P/S): 3.97
• P/FCF Ratio: -62.44
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 8.01
• Enterprise Value/Gross Profit: 26.17
• Enterprise Value/Ebitda: 80.57
• 1Y Price Target: $274.43
• Price Target Upside: -18.60% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 5.79
• Revenue Forecast (FY): $2.62B

• Rating: 61 Neutral
• Price Target: $343.00 ▲(1.74% Upside)

Lumentum Holdings' overall stock score is driven by strong technical momentum and positive earnings call insights, offset by financial performance concerns and high valuation. The company's growth in AI and cloud infrastructure is promising, but operational and financial risks need careful management.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand, particularly in AI and cloud infrastructure, supporting long-term expansion.

Market Position in AI and Cloud

Dominance in AI and cloud sectors positions Lumentum favorably for sustained growth, leveraging industry trends towards digital transformation.

Capacity Expansion

Increasing manufacturing capacity will enable Lumentum to meet growing demand, enhancing its ability to scale and maintain competitive advantage.

Negative Factors

High Debt Levels

Significant leverage poses financial risk, potentially impacting cash flow and limiting strategic flexibility in adverse market conditions.

Cash Flow Constraints

Limited cash generation relative to net income could hinder investment in growth initiatives and affect operational stability.

Operational Inefficiencies

Operational inefficiencies reflected in negative EBIT margin may undermine profitability, requiring strategic improvements to enhance efficiency.

Lumentum Holdings Business Overview & Revenue Model

Company Description

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables. It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.

How the Company Makes Money

Lumentum generates revenue through the sale of its optical and laser products, which are critical in telecommunications infrastructure, data centers, and industrial applications. The company's revenue model is primarily based on the sale of its products to original equipment manufacturers (OEMs) and system integrators. Key revenue streams include optical components, such as lasers and transceivers, and commercial laser products used in manufacturing and material processing. Significant partnerships with major telecommunications companies and technology firms enhance Lumentum's market reach and provide a steady demand for its products, contributing to its overall earnings. The company's focus on innovation and adaptation to emerging market needs, such as 5G and advanced manufacturing solutions, further supports its revenue growth.

Lumentum Holdings Financial Statement Overview

Summary

Lumentum Holdings shows strong revenue growth but faces challenges with profitability and operational efficiency. The high debt-to-equity ratio and cash flow constraints highlight financial risks that need addressing.

Income Statement

Lumentum Holdings shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 30.59% and a net profit margin of 6.11%, which are reasonable but not outstanding. Revenue growth is strong at 11.97% TTM, indicating a positive trend. However, the negative EBIT margin of -3.55% suggests operational inefficiencies. The EBITDA margin of 9.93% TTM is moderate, showing some profitability at the operating level.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.20 TTM, indicating significant leverage and potential financial risk. The return on equity is low at 2.74% TTM, reflecting limited profitability for shareholders. The equity ratio of 16.92% TTM suggests a lower proportion of equity financing, which could be a concern for stability.

Cash Flow

Cash flow analysis shows challenges, with a significant decline in free cash flow growth at -88.25% TTM. The operating cash flow to net income ratio is low at 0.09 TTM, indicating limited cash generation relative to net income. The negative free cash flow to net income ratio of -0.09 TTM further highlights cash flow constraints.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.84B	1.65B	1.36B	1.77B	1.71B	1.71B
Gross Profit	563.50M	459.90M	251.50M	569.00M	788.60M	788.60M
EBITDA	183.00M	106.80M	-81.60M	188.70M	482.40M	482.40M
Net Income	112.50M	25.90M	-546.50M	-131.60M	198.90M	198.90M
Balance Sheet
Total Assets	4.61B	4.22B	3.93B	4.63B	4.16B	3.55B
Cash, Cash Equivalents and Short-Term Investments	1.12B	877.10M	887.00M	2.01B	2.55B	1.95B
Total Debt	3.28B	2.61B	2.56B	2.87B	1.94B	1.24B
Total Liabilities	3.83B	3.08B	2.97B	3.28B	2.29B	1.58B
Stockholders Equity	780.80M	1.13B	957.30M	1.36B	1.88B	1.97B
Cash Flow
Free Cash Flow	-88.50M	-104.70M	-111.30M	51.30M	368.10M	643.90M
Operating Cash Flow	144.60M	126.30M	24.70M	179.80M	459.30M	738.70M
Investing Cash Flow	-104.80M	-84.10M	-114.30M	-874.00M	-226.30M	1.00M
Financing Cash Flow	243.90M	41.80M	-332.70M	263.00M	282.90M	-263.40M

Lumentum Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 337.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LITE, the sentiment is Positive. The current price of 337.13 is above the 20-day moving average (MA) of 318.47, above the 50-day MA of 248.06, and above the 200-day MA of 134.68, indicating a bullish trend. The MACD of 25.13 indicates Positive momentum. The RSI at 59.62 is Neutral, neither overbought nor oversold. The STOCH value of 24.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LITE.

Lumentum Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIAV	71 Outperform	$3.83B	264.84	2.13%	―	15.60%	―
CIEN	70 Outperform	$28.72B	248.07	4.45%	―	18.79%	49.53%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LITE	61 Neutral	$22.71B	225.37	13.42%	―	33.62%	―
COMM	60 Neutral	$3.94B	―	―	―	9.86%	99.11%
EXTR	59 Neutral	$2.23B	264.57	17.08%	―	14.31%	―
PI	56 Neutral	$5.01B	-391.99	-7.49%	―	4.24%	-141.83%

Lumentum Holdings Corporate Events

Lumentum Holdings Concludes 2025 Annual Meeting

On November 19, 2025, Lumentum Holdings held its 2025 Annual Meeting, with 87.24% of outstanding shares represented. Key decisions included the election of directors, approval of executive compensation on a non-binding basis, approval of the 2025 Equity Incentive Plan, and ratification of Deloitte & Touche LLP as the independent auditor for the fiscal year ending June 27, 2026.