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Lumentum Holdings Inc (LITE)
:LITE
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Lumentum Holdings
(NASDAQ:LITE)
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Rating:65Neutral
Price Target:
$118.00
▼(-30.07% Downside)
Lumentum Holdings' overall stock score reflects a strong technical analysis and positive earnings call sentiment, indicating growth potential, particularly in the Cloud & Networking segment. However, substantial financial challenges, including declining revenue and increased leverage, weigh heavily on the score. Valuation concerns, highlighted by a negative P/E ratio, further impact the score. The company's ability to execute strategic improvements will be crucial in addressing these risks.
Positive Factors
Cloud & Networking Segment Growth
The growth in the Cloud & Networking segment indicates strong demand from hyperscale cloud customers, positioning Lumentum well in a rapidly expanding market.
Non-GAAP Gross Margin Improvement
Improved gross margins suggest better cost management and operational efficiency, enhancing profitability and competitive positioning.
Transceiver Market Expansion
Increased production capacity for transceivers supports revenue growth and market share expansion in the cloud sector, a key growth area.
Negative Factors
Declining Revenue
A decline in revenue indicates challenges in maintaining sales momentum, which could impact long-term growth and market competitiveness.
Rising Leverage
Increased leverage may strain financial flexibility, raising the risk profile and potentially limiting future investment and growth opportunities.
Negative Free Cash Flow
Negative free cash flow suggests operational challenges and may hinder the company's ability to invest in growth initiatives or weather economic downturns.
Lumentum Holdings (LITE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.79B
Dividend YieldN/A
Average Volume (3M)4.12M
Price to Earnings (P/E)715.6
Beta (1Y)2.58
Revenue Growth21.03%
EPS GrowthN/A
CountryUS
Employees7,257
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.88
Shares Outstanding69,900,000
10 Day Avg. Volume3,772,651
30 Day Avg. Volume4,118,410
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.73
Enterprise Value/Revenue5.81
Enterprise Value/Gross Profit25.75
Enterprise Value/Ebitda-12.22K
Forecast
1Y Price Target
$137.94Price Target Upside-18.25% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Lumentum Holdings Business Overview & Revenue Model
Company DescriptionLumentum Holdings Inc. (LITE) is a leading provider of optical and photonic products, primarily serving the telecommunications, data communications, and commercial laser markets. The company designs and manufactures high-performance optical subsystems and components, including 3D sensing capabilities, which are crucial for advanced manufacturing, networking, and consumer electronics applications.
How the Company Makes MoneyLumentum Holdings generates revenue through the sale of its optical and photonic products to a diverse range of customers, including telecommunications companies, data center operators, and manufacturers of consumer electronics. Its key revenue streams include products for optical communications, such as transmission modules and amplifiers, and commercial lasers utilized in various industrial applications. The company also benefits from strategic partnerships and long-term supply agreements with major technology firms, contributing to stable and recurring revenue.
Lumentum Holdings Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in the Cloud & Networking segment, driven by high demand for optical components and modules. The company is experiencing robust growth and profitability, with significant opportunities in optical circuit switches and co-packaged optics. However, challenges in the Industrial Tech segment and supply constraints for certain components temper the outlook. Overall, the company's positive momentum in cloud and AI markets suggests a promising future.Q4-2025 Updates
Positive Updates
Cloud & Networking Segment Growth
Fourth quarter revenue from the Cloud & Networking segment increased 16% sequentially and 67% year-over-year, driven by hyperscale cloud customers. The company expects to surpass $600 million in quarterly revenue by June 2026 or earlier.
Record EML Shipments
Achieved an all-time high in EML shipments, nearly doubling revenue compared to June quarter 2024 baseline. Significant order for 200-gig lane speed EML chips received for the December quarter.
Strong Financial Performance
Fourth quarter revenue of $480.7 million and non-GAAP EPS of $0.88 were both above revised guidance. Non-GAAP gross margin was 37.8%, up 260 basis points sequentially and 1,000 basis points year-on-year.
Expansion of Optical Circuit Switches
First revenue recognized from optical circuit switches with shipments to 2 hyperscale customers. A third hyperscale customer committed to deploy OCS product in calendar 2026.
Commitment to Co-packaged Optics
Received the largest single purchase commitment in company history for ultra high-power lasers, with investments in U.S.-based indium phosphide wafer fab to support it.
Positive Outlook for Fiscal 2026
Guidance for the first quarter of fiscal 2026 projects record revenue between $510 million to $540 million and operating margin between 16% to 17.5%.
Negative Updates
Industrial Tech Segment Decline
Industrial Tech segment revenue decreased 6% sequentially, though it was up 6% from the same quarter last year. Declines were noted in industrial lasers and 3D sensing.
Demand Outpacing Supply
Manufacturing capacity for narrow linewidth lasers is ramping, but demand is expected to outpace supply throughout fiscal 2026.
High Operating Expenses
Fourth quarter non-GAAP operating expenses increased by $5.9 million from the third quarter and $7.9 million from the same quarter last year, reflecting employee cash incentives and investments for cloud opportunities.
Company Guidance
During Lumentum Holdings' fourth quarter fiscal year 2025 earnings call, the company provided guidance indicating strong growth driven by the cloud and AI infrastructure market. They expect cloud revenue to grow over 20% annually, with gross margins surpassing 40% and operating margins targeted above 20%. The company anticipates reaching $600 million in quarterly revenue by June 2026 or earlier. The fourth quarter saw a 16% sequential and 67% year-over-year increase in revenue from the Cloud & Networking segment, driven by demand from hyperscale cloud customers. They achieved an all-time high in EML shipments, nearly doubling revenue compared to the previous year. The guidance for the first quarter of fiscal 2026 projects revenue between $510 million and $540 million, setting a new quarterly revenue record, with expectations for continued sequential growth in Cloud & Networking. The strategic focus remains on high-value products and disciplined cost management to drive revenue growth and profitability.Lumentum Holdings Financial Statement Overview
Summary
Lumentum Holdings is facing significant financial challenges with declining revenue, increased leverage, and net losses. The income statement shows deteriorating profitability and margins, while the balance sheet reflects higher financial risk due to increased debt. Cash flow analysis indicates negative free cash flow, signaling operational and financial strain. The company needs strategic adjustments to improve profitability and financial stability.Income Statement
Lumentum Holdings has seen a decline in revenue growth with revenue decreasing from $1.76 billion in 2023 to $1.35 billion in 2024. Gross profit margin and net profit margin have significantly deteriorated, with the company reporting negative net income in recent periods, indicating challenges in maintaining profitability and cost management. The EBIT and EBITDA margins are also negative, highlighting operating difficulties.45
Neutral
Balance Sheet
The debt-to-equity ratio has increased, reflecting rising leverage and potential financial risk. The company's equity ratio has declined, indicating a reduced proportion of equity financing. Return on equity is negative, consistent with the net losses reported, suggesting the company is currently not generating returns on shareholder investments. The overall financial stability is under pressure due to increased liabilities.50
Neutral
Cash Flow
Free cash flow has turned negative, reflecting increased financial strain. The operating cash flow to net income ratio is positive but reflects the company's reliance on cash reserves to fund operations amidst net losses. Free cash flow to net income ratio is unfavorable, emphasizing the challenges in generating positive cash flow in the face of financial losses.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.47B | 1.36B | 1.77B | 1.71B | 1.74B | 1.68B |
| Gross Profit | 332.20M | 251.50M | 569.00M | 788.60M | 783.10M | 650.20M |
| EBITDA | -700.00K | -110.70M | 167.40M | 482.40M | 706.90M | 419.40M |
| Net Income | -439.90M | -546.50M | -131.60M | 198.90M | 397.30M | 135.50M |
Balance Sheet | ||||||
| Total Assets | 3.98B | 3.93B | 4.63B | 4.16B | 3.55B | 3.29B |
| Cash, Cash Equivalents and Short-Term Investments | 866.70M | 887.00M | 2.01B | 2.55B | 1.95B | 1.55B |
| Total Debt | 2.61B | 2.56B | 2.87B | 1.94B | 1.24B | 1.19B |
| Total Liabilities | 3.10B | 2.97B | 3.28B | 2.29B | 1.58B | 1.54B |
| Stockholders Equity | 879.50M | 957.30M | 1.36B | 1.88B | 1.97B | 1.75B |
Cash Flow | ||||||
| Free Cash Flow | -103.90M | -111.30M | 51.30M | 368.10M | 653.90M | 438.30M |
| Operating Cash Flow | 97.80M | 24.70M | 179.80M | 459.30M | 738.70M | 524.30M |
| Investing Cash Flow | -52.20M | -114.30M | -874.00M | -226.30M | 1.00M | -987.70M |
| Financing Cash Flow | 45.80M | -332.70M | 263.00M | 282.90M | -263.40M | 328.80M |
Lumentum Holdings Technical Analysis
Positive
168.73
Price Trends
124.26
Positive
102.07
Positive
88.57
Positive
Market Momentum
14.21
Negative
73.80
Negative
81.13
Negative
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 168.73 is above the 20-day moving average (MA) of 147.84, above the 50-day MA of 124.26, and above the 200-day MA of 88.57, indicating a bullish trend. The MACD of 14.21 indicates Negative momentum. The RSI at 73.80 is Negative, neither overbought nor oversold. The STOCH value of 81.13 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 19.52B | 142.91 | 5.05% | ― | 12.97% | 4.71% | |
68 Neutral | 5.57B | 26,611.11 | 0.34% | ― | 13.96% | -96.21% | |
67 Neutral | 2.95B | -383.82 | -11.39% | ― | 2.05% | 91.37% | |
65 Neutral | $11.79B | 715.56 | 2.48% | ― | 21.03% | ― | |
65 Neutral | 2.73B | 79.69 | 4.46% | ― | 8.39% | 0.00% | |
56 Neutral | 760.50M | -7.19 | -64.24% | ― | 3.52% | 81.33% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
LITE
Lumentum Holdings
168.73
107.50
175.57%
CIEN
Ciena
138.37
76.69
124.34%
EXTR
Extreme Networks
22.30
7.32
48.87%
COMM
CommScope Holding
16.45
10.16
161.53%
VIAV
Viavi Solutions
12.24
3.77
44.51%
PI
IMPINJ
191.60
-16.57
-7.96%
Lumentum Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Lumentum Holdings Updates Revenue Guidance for June 2025
Positive
Jun 3, 2025
On June 3, 2025, Lumentum Holdings Inc. announced an updated revenue guidance for the quarter ending June 28, 2025, indicating an improved financial outlook. The company expects to achieve $500 million in revenue by the next quarter, Q1 FY26, earlier than previously anticipated, and maintains its $600 million per quarter revenue outlook for Q4 FY26/Q1 FY27. This update reflects a positive shift in Lumentum’s operational performance and market positioning, potentially impacting stakeholders by signaling stronger financial health and growth prospects.
The most recent analyst rating on (LITE) stock is a Buy with a $65.00 price target. To see the full list of analyst forecasts on Lumentum Holdings stock, see the LITE Stock Forecast page.
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.