Lumentum Holdings Inc (LITE)
NASDAQ:LITE
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Lumentum Holdings
(NASDAQ:LITE)
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Rating:72Outperform
Price Target:
$1,142.00
▲(27.73% Upside)
Action:Upgraded
Date:05/09/26
The score is driven by strong technical momentum and a clear operational upturn reinforced by upbeat guidance and record revenue expectations. These positives are tempered by a still-levered and historically volatile cash-flow profile and a high valuation (P/E ~87), which increases downside sensitivity if supply constraints or execution limit the growth outlook.
Positive Factors
Record Revenue Growth
Lumentum's sharp revenue rebound, driven by transceivers and laser chips, reflects durable demand from cloud and data-center customers. A sustained top-line expansion improves scale economics and underpins long-term investments in capacity and product development across optical communications.
Negative Factors
Meaningful Leverage
Material leverage reduces financial flexibility to fund capex and absorb cyclical downturns. Even with recent improvements, elevated debt relative to equity constrains margin of safety for multiyear capacity investments and increases interest and refinancing risk if revenue or cash flow weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Revenue Growth
Lumentum's sharp revenue rebound, driven by transceivers and laser chips, reflects durable demand from cloud and data-center customers. A sustained top-line expansion improves scale economics and underpins long-term investments in capacity and product development across optical communications.
Read all positive factors
Lumentum Holdings Key Performance Indicators (KPIs)
Any
Revenue by Segment
How sales split across Lumentum’s product lines and end markets, showing which businesses drive growth, profit margins, and sensitivity to demand cycles. Segment mix reveals whether the company depends more on telecom and data‑center optics, which can be cyclical, or on commercial lasers and sensing, which may offer different growth and margin profiles — changes in the mix can signal margin pressure or faster expansion opportunities.
How sales split across Lumentum’s product lines and end markets, showing which businesses drive growth, profit margins, and sensitivity to demand cycles. Segment mix reveals whether the company depends more on telecom and data‑center optics, which can be cyclical, or on commercial lasers and sensing, which may offer different growth and margin profiles — changes in the mix can signal margin pressure or faster expansion opportunities.
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The FlyLumentum Holdings (LITE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.21B
Dividend YieldN/A
Average Volume (3M)6.36M
Price to Earnings (P/E)144.6
Beta (1Y)2.27
Revenue Growth68.98%
EPS GrowthN/A
CountryUS
Employees7,257
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)6.21
Shares Outstanding77,800,000
10 Day Avg. Volume6,553,465
30 Day Avg. Volume6,357,473
Financial Highlights & Ratios
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 Cap0.97
Enterprise Value/Revenue27.01
Enterprise Value/Gross Profit71.62
Enterprise Value/Ebitda121.72
Forecast
1Y Price Target
$1,077.19Price Target Upside20.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
EPS Forecast (FY)8.23
Revenue Forecast (FY)$2.99B
Lumentum Holdings Business Overview & Revenue Model
Company Description
Lumentum Holdings Inc., established in 2015 and headquartered in San Jose, California, is a global leader in optical and photonic product manufacturing. The company's reach extends across the Americas, Asia-Pacific, Europe, the Middle East, and Af...
How the Company Makes Money
Lumentum primarily makes money by selling photonics components, modules, and subsystems to other businesses (B2B) across two main end-market areas: (1) optical communications and (2) commercial/industrial (and historically certain consumer-facing ...
Lumentum Holdings Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Positive
The call reported very strong top-line growth, substantial margin expansion, robust product shipment momentum (notably lasers and EMLs), strategic manufacturing expansion, and a strengthened balance sheet driven by a large strategic investment. Offsetting these positives are material and multi-product supply constraints (EMLs, pump lasers, narrow-linewidth lasers, OCS components) that are capping near-term shipments and forcing allocation decisions, plus the fact that new Greensboro capacity is not available until 2028. On balance, management conveyed execution confidence, meaningful near-term guidance upside, and active mitigation plans (CapEx, LTAs, contract manufacturing), while acknowledging elevated supply risks that require resolution.Positive Updates
Record Quarterly Revenue
Revenue reached a record $808.4M, up 90% year-over-year, above the midpoint of guidance and driven primarily by transceivers and laser chips.
Negative Updates
Widespread Supply Constraints
Significant supply-demand imbalances across multiple product lines: EML supply shortfall reportedly >30% and pump lasers/narrow-linewidth pumps experiencing even greater tightness; wafer fab capacity in Japan fully allocated.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarterly Revenue
Revenue reached a record $808.4M, up 90% year-over-year, above the midpoint of guidance and driven primarily by transceivers and laser chips.
Read all positive updates
Company Guidance
Guidance for Q4 (FY26) was provided on a non‑GAAP basis: Lumentum expects revenue of $960 million to $1.01 billion (midpoint $985 million, a new quarterly record), with the company noting that >50% of the sequential growth is expected to come from components and the remainder from systems (primarily high‑speed transceivers and additional OCS), and they expect to ramp 1.6T transceivers in the quarter; projected non‑GAAP operating margin is 35%–36%, non‑GAAP diluted net income per share is $2.85–$3.05 (based on an annual non‑GAAP effective tax rate of 16.5% and approximately 102 million diluted shares), and the guide assumes modest initial insourcing (~20% of modules using Lumentum CW lasers) while management reiterates the longer‑term $2 billion quarterly target.Lumentum Holdings Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
58
Neutral
Cash Flow
61
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.49B | 1.65B | 1.36B | 1.77B | 1.71B | 1.71B |
| Gross Profit | 938.50M | 459.90M | 251.50M | 569.00M | 788.60M | 788.60M |
| EBITDA | 552.20M | 106.80M | -81.60M | 188.70M | 482.40M | 482.40M |
| Net Income | 439.90M | 25.90M | -546.50M | -131.60M | 198.90M | 198.90M |
Balance Sheet | ||||||
| Total Assets | 7.03B | 4.22B | 3.93B | 4.63B | 4.16B | 3.55B |
| Cash, Cash Equivalents and Short-Term Investments | 3.17B | 877.10M | 887.00M | 2.01B | 2.55B | 1.95B |
| Total Debt | 3.31B | 2.61B | 2.56B | 2.87B | 1.94B | 1.24B |
| Total Liabilities | 4.05B | 3.08B | 2.97B | 3.28B | 2.29B | 1.58B |
| Stockholders Equity | 2.97B | 1.13B | 957.30M | 1.36B | 1.88B | 1.97B |
Cash Flow | ||||||
| Free Cash Flow | 273.80M | -104.70M | -111.30M | 51.30M | 368.10M | 643.90M |
| Operating Cash Flow | 452.40M | 126.30M | 24.70M | 179.80M | 459.30M | 738.70M |
| Investing Cash Flow | -540.50M | -84.10M | -114.30M | -874.00M | -226.30M | 1.00M |
| Financing Cash Flow | 2.19B | 41.80M | -332.70M | 263.00M | 282.90M | -263.40M |
Lumentum Holdings Technical Analysis
Positive
894.07
Price Trends
897.60
Negative
744.58
Positive
493.34
Positive
Market Momentum
-6.62
Positive
49.17
Neutral
28.83
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 894.07 is below the 20-day moving average (MA) of 909.83, below the 50-day MA of 897.60, and above the 200-day MA of 493.34, indicating a neutral trend. The MACD of -6.62 indicates Positive momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 28.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LITE.
Lumentum Holdings Risk Analysis
Lumentum Holdings disclosed 45 risk factors in its most recent earnings report. Lumentum Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lumentum Holdings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $69.21B | 144.59 | 30.68% | ― | 68.98% | ― | |
68 Neutral | $63.02B | 144.19 | 8.26% | ― | 30.59% | 323.23% | |
66 Neutral | $4.06B | 253.79 | 21.07% | ― | 14.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $3.96B | -142.47 | -13.90% | ― | -0.69% | -3584.62% | |
54 Neutral | $12.31B | -211.54 | -6.92% | ― | 30.59% | -1171.00% |
* Technology Sector Average
LITE
Lumentum Holdings
889.59
804.09
940.46%
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445.22
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Extreme Networks
31.07
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50.24
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PI
IMPINJ
130.08
21.18
19.45%
Lumentum Holdings Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Lumentum Reduces Convertible Debt Through Private Share Exchange
Neutral
Jun 1, 2026
On May 29, 2026, Lumentum Holdings Inc. agreed in privately negotiated deals to exchange about $650.4 million of its 0.50% Convertible Senior Notes due 2028 for roughly 5.0 million shares of common stock, representing the principal and related con...
Business Operations and StrategyPrivate Placements and Financing
Lumentum Reduces Convertible Debt Through Equity Exchange Agreements
Positive
Apr 8, 2026
On April 7, 2026, Lumentum Holdings Inc. entered into privately negotiated exchange agreements with certain holders of its 0.50% Convertible Senior Notes due 2026 and 1.50% Convertible Senior Notes due 2029, agreeing to deliver about 5.7 million c...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.