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Lumentum Holdings
(NASDAQ:LITE)
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Rating:71Outperform
Price Target:
$1,071.00
▲(40.37% Upside)
Action:Upgraded
Date:08/18/26
The score is driven primarily by strong technical momentum and an upbeat earnings call with robust forward guidance and expanding non-GAAP margins. Financials are mixed—improving revenue, cash flow, and leverage are positives, but the extremely large GAAP loss and earnings volatility materially increase uncertainty. Valuation is constrained by a negative P/E and no stated dividend yield.
Positive Factors
Secular optical demand and broad-based growth
Lumentum is benefiting from sustained demand for higher-bandwidth optical connectivity as cloud and AI workloads expand. Growth across both components and systems, alongside 800G and 1.6T adoption, supports a durable multi-quarter opportunity.
Negative Factors
Severe GAAP loss and unstable earnings quality
Although the charge was non-cash and tied to debt conversion, the resulting loss highlights substantial divergence between GAAP and adjusted results. Persistent earnings volatility makes normalized profitability harder to assess and increases reporting risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Secular optical demand and broad-based growth
Lumentum is benefiting from sustained demand for higher-bandwidth optical connectivity as cloud and AI workloads expand. Growth across both components and systems, alongside 800G and 1.6T adoption, supports a durable multi-quarter opportunity.
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 Fly
The FlyLumentum Holdings (LITE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$75.38B
Dividend YieldN/A
Average Volume (3M)4.63M
Price to Earnings (P/E)―
Beta (1Y)2.22
Revenue Growth83.22%
EPS Growth-24212.72%
CountryUS
Employees10,562
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-92.96
Shares Outstanding77,800,000
10 Day Avg. Volume4,110,863
30 Day Avg. Volume4,625,475
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)13.12
Price to Sales (P/S)20.22
P/FCF Ratio81.11
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$1,099.38Price Target Upside44.09% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)21.28
Revenue Forecast (FY)$6.17B
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 makes money primarily by selling photonics products (components, modules, and subsystems) to other businesses, with revenue recognized from product shipments under customer purchase orders and supply agreements. A major revenue stream com...
Lumentum Holdings Earnings Call Summary
Earnings Call Date:Aug 11, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call highlighted substantial revenue acceleration, strong margin expansion, record shipments across multiple product lines, and accelerated adoption of 1.6T and new optical architectures (NPO/CPO/ELS). Management provided confident near-term guidance (Q1 midpoint $1.25B) and outlined capacity and supply actions (AXT deal, Greensboro ramp, CapEx). Key challenges were a large one-time GAAP charge from convertible note conversions (non-cash), continued supply constraints in certain products (notably ultra-high-power lasers and ongoing EML demand shortfall), and a cash decline tied to the conversion. Overall, positives (strong growth, margin leverage, product momentum, guidance beat) materially outweigh the negatives, though execution on supply ramp and capacity expansion remains critical.Positive Updates
Record Quarterly Revenue and Strong Growth Momentum
Revenue surged 109% year-over-year to $1.01 billion in Q4, marking the eighth consecutive quarter of top-line growth and the third consecutive quarter with >20% sequential growth.
Negative Updates
Large One-Time GAAP Charge and GAAP Net Loss
Company proactively converted in-the-money convertible notes which reduced debt by ~$1.1B but produced a one-time non-cash GAAP charge of $7.8B, resulting in a Q4 GAAP net loss of $7.2B.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Quarterly Revenue and Strong Growth Momentum
Revenue surged 109% year-over-year to $1.01 billion in Q4, marking the eighth consecutive quarter of top-line growth and the third consecutive quarter with >20% sequential growth.
Read all positive updates
Company Guidance
Lumentum guided Q1 FY27 non‑GAAP revenue of $1.225–$1.275 billion (midpoint $1.25B, >130% YoY), non‑GAAP operating margin of 39.5%–40.5% and diluted non‑GAAP EPS of $4.05–$4.35 (assumes a 16.5% non‑GAAP tax rate and roughly 102M diluted shares). Management said the midpoint hits the $1.25B target more than one quarter early and that the Q1 operating margin exceeds the high end of the company’s target model at this revenue level; they expect roughly half of sequential growth to come from components and half from systems (1.6T transceivers and accelerating OCS deliveries) and continued gross‑margin expansion driven by mix and execution (Q4 non‑GAAP gross margin was 50.4%, Q4 revenue $1.01B, Q4 non‑GAAP operating margin 36.6%, Q4 non‑GAAP EPS $3.23).Lumentum Holdings Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
62
Positive
Cash Flow
57
Neutral
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.01B | 1.65B | 1.36B | 1.77B | 1.71B |
| Gross Profit | 1.26B | 459.90M | 251.50M | 569.00M | 788.60M |
| EBITDA | -7.02B | 106.80M | -81.60M | 188.70M | 482.40M |
| Net Income | -6.94B | 25.90M | -546.50M | -131.60M | 198.90M |
Balance Sheet | |||||
| Total Assets | 7.31B | 4.22B | 3.93B | 4.63B | 4.16B |
| Cash, Cash Equivalents and Short-Term Investments | 2.74B | 877.10M | 887.00M | 2.01B | 2.55B |
| Total Debt | 1.67B | 2.61B | 2.56B | 2.87B | 1.94B |
| Total Liabilities | 2.66B | 3.08B | 2.97B | 3.28B | 2.29B |
| Stockholders Equity | 4.64B | 1.13B | 957.30M | 1.36B | 1.88B |
Cash Flow | |||||
| Free Cash Flow | 751.40M | -104.70M | -111.30M | 51.30M | 368.10M |
| Operating Cash Flow | 751.40M | 126.30M | 24.70M | 179.80M | 459.30M |
| Investing Cash Flow | -785.50M | -84.10M | -114.30M | -874.00M | -226.30M |
| Financing Cash Flow | 1.56B | 41.80M | -332.70M | 263.00M | 282.90M |
Lumentum Holdings Technical Analysis
Positive
762.99
Price Trends
814.35
Positive
848.87
Positive
642.76
Positive
Market Momentum
33.70
Negative
53.24
Neutral
67.86
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 762.99 is below the 20-day moving average (MA) of 809.95, below the 50-day MA of 814.35, and above the 200-day MA of 642.76, indicating a bullish trend. The MACD of 33.70 indicates Negative momentum. The RSI at 53.24 is Neutral, neither overbought nor oversold. The STOCH value of 67.86 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $75.38B | -10.42 | -300.07% | ― | 83.22% | -24212.72% | |
68 Neutral | $63.02B | 144.07 | 15.65% | ― | 30.59% | 323.23% | |
67 Neutral | $3.18B | 75.71 | 50.74% | ― | 12.59% | ― | |
64 Neutral | $11.41B | -360.28 | -3.16% | ― | 40.03% | -193.79% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $5.25B | -189.15 | -12.86% | ― | 3.51% | -5666.87% |
* Technology Sector Average
LITE
Lumentum Holdings
873.31
755.35
640.34%
CIEN
Ciena
405.54
316.77
356.84%
EXTR
Extreme Networks
23.75
3.76
18.81%
VIAV
Viavi Solutions
41.37
30.71
288.09%
PI
IMPINJ
168.07
1.52
0.91%
Lumentum Holdings Corporate Events
Business Operations and StrategyExecutive/Board Changes
Lumentum announces upcoming leadership transition in quality unit
Neutral
Jul 30, 2026
On July 27, 2026, Lumentum Holdings Inc. disclosed that Vincent Retort, Executive Vice President, Global Reliability Quality, plans to retire from the company effective October 2026. The announcement marks a leadership transition in a function ce...
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...
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.