Lumentum Holdings (LITE) AI Stock Analysis

• Market Cap: $9.28B
• Dividend Yield: N/A
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 563.2
• Beta (1Y): 2.58
• Revenue Growth: 21.03%
• EPS Growth: N/A
• Country: US
• Employees: 7,257
• Sector: Technology
• Sector Strength: 87
• Industry: Communication Equipment
• EPS (TTM): 0.88
• Shares Outstanding: 69,900,000
• 10 Day Avg. Volume: 3,241,584
• 30 Day Avg. Volume: 3,054,236
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 5.81
• Enterprise Value/Gross Profit: 25.75
• Enterprise Value/Ebitda: -12.22K
• 1Y Price Target: $137.31
• Price Target Upside: 3.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 65 Neutral
• Price Target: $118.00 ▼(-11.15% 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

Market Positioning

Lumentum is considered a primary beneficiary of the AI accelerators ramp as it provides the key Electro-absorption Modulated Laser (EML) used in most AI transceivers.

Product Innovation

Lumentum is expected to outpace both company and Street’s longer-term expectations with the ramp of its industry leading EML and its new AI products in emerging markets such as OCS and CPO.

Negative Factors

Market Expectations

The stock's recent 50% rise since the pre-announcement has already priced in much of the expected performance, limiting further upside in the near term.

Operational Challenges

Lumentum's ability to supply and ramp up new technologies is seen as a limiting factor, particularly against high expectations.

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 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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 132.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 132.81 is above the 20-day moving average (MA) of 118.70, above the 50-day MA of 106.12, and above the 200-day MA of 83.56, indicating a bullish trend. The MACD of 6.91 indicates Negative momentum. The RSI at 73.37 is Negative, neither overbought nor oversold. The STOCH value of 87.86 is Negative, 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
CIEN	71 Outperform	$13.28B	130.90	3.71%	―	2.86%	-29.92%
PI	70 Outperform	$5.45B	26,037.50	0.42%	―	13.96%	-96.21%
EXTR	67 Neutral	$2.83B	―	-16.44%	―	2.05%	91.37%
LITE	65 Neutral	$9.28B	563.23	2.48%	―	21.03%	―
Sector *	61 Neutral	$35.48B	7.63	-10.11%	1.88%	8.73%	-9.23%
VIAV	58 Neutral	$2.52B	73.44	4.76%	―	8.39%	―
ADTN	57 Neutral	$750.89M	―	-53.68%	―	3.52%	81.33%

Lumentum Holdings Corporate Events

Lumentum Holdings Updates Revenue Guidance for June 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.