Lumentum Holdings (LITE) AI Stock Analysis

• Market Cap: $14.29B
• Dividend Yield: N/A
• Average Volume (3M): 3.17M
• Price to Earnings (P/E): 854.8
• Beta (1Y): 2.64
• Revenue Growth: 21.03%
• EPS Growth: N/A
• Country: US
• Employees: 7,257
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.88
• Shares Outstanding: 70,912,590
• 10 Day Avg. Volume: 3,468,659
• 30 Day Avg. Volume: 3,165,588
• 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: 0.60
• Enterprise Value/Revenue: 5.20
• Enterprise Value/Gross Profit: 18.60
• Enterprise Value/Ebitda: 80.16
• 1Y Price Target: $162.76
• Price Target Upside: -19.25% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 54 Neutral
• Price Target: $198.00 ▼(-1.77% Downside)

Lumentum Holdings' overall stock score is driven by significant financial challenges and overvaluation concerns. Despite strong technical momentum, the stock's high P/E ratio and lack of dividend yield weigh heavily on its attractiveness. The positive outlook from the earnings call is a bright spot, but financial and valuation issues dominate the overall assessment.

Positive Factors

Cloud & Networking Segment Growth

Strong growth in the Cloud & Networking segment indicates robust demand and positions Lumentum well in the expanding cloud infrastructure market, supporting long-term revenue growth.

Record EML Shipments

Record EML shipments highlight Lumentum's competitive edge in optical components, bolstering its market position and driving sustainable revenue growth.

Commitment to Co-packaged Optics

The significant commitment to co-packaged optics underscores Lumentum's strategic focus on innovation, enhancing its competitive advantage and long-term growth prospects.

Negative Factors

High Debt Levels

Elevated debt levels pose financial risks, potentially limiting Lumentum's ability to invest in growth opportunities and affecting long-term financial stability.

Negative Cash Flow

Negative cash flow challenges indicate operational inefficiencies, which could strain Lumentum's ability to fund future growth and maintain financial health.

Industrial Tech Segment Decline

Declines in the Industrial Tech segment suggest challenges in diversifying revenue streams, potentially impacting Lumentum's overall growth and market resilience.

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 faces significant financial challenges. Despite revenue growth, profitability and cash flow metrics indicate operational difficulties. High leverage and low returns on equity further exacerbate financial risk.

Income Statement

Lumentum Holdings has shown a mixed performance in its income statement. The company experienced a revenue growth of 11.71% in the latest year, indicating a positive trend. However, profitability metrics such as the EBIT and EBITDA margins are negative, reflecting operational challenges. The gross profit margin has improved to 27.96% from the previous year, but the net profit margin remains low at 1.57%, suggesting limited profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.30, indicating significant leverage and potential financial risk. The return on equity is low at 2.28%, reflecting limited returns for shareholders. The equity ratio stands at 26.90%, showing a moderate level of equity financing. Overall, the balance sheet suggests financial instability due to high leverage.

Cash Flow

Cash flow analysis shows a concerning trend with negative free cash flow and a free cash flow to net income ratio of -0.83, indicating cash flow challenges. The operating cash flow to net income ratio is 0.32, suggesting limited cash generation relative to net income. Despite a 77% growth in free cash flow, the overall cash flow position remains weak.

Breakdown	TTM	Dec 2025	Dec 2025	Dec 2024	Dec 2024	Dec 2023
Income Statement
Total Revenue	1.65B	1.65B	1.65B	1.36B	1.36B	1.77B
Gross Profit	459.90M	459.90M	459.90M	251.50M	251.50M	569.00M
EBITDA	106.70M	104.10M	104.10M	-110.70M	-110.70M	167.40M
Net Income	25.90M	25.90M	25.90M	-546.50M	-546.50M	-131.60M
Balance Sheet
Total Assets	4.22B	4.22B	4.22B	3.93B	3.93B	4.63B
Cash, Cash Equivalents and Short-Term Investments	877.10M	877.10M	877.10M	887.00M	887.00M	2.01B
Total Debt	2.61B	2.61B	2.61B	2.56B	2.56B	2.87B
Total Liabilities	3.08B	3.08B	3.08B	2.97B	2.97B	3.28B
Stockholders Equity	1.13B	1.13B	1.13B	957.30M	957.30M	1.36B
Cash Flow
Free Cash Flow	-104.70M	-104.70M	-104.70M	-111.30M	-111.30M	51.30M
Operating Cash Flow	126.30M	126.30M	126.30M	24.70M	24.70M	179.80M
Investing Cash Flow	-84.10M	-84.10M	-84.10M	-114.30M	-114.30M	-874.00M
Financing Cash Flow	41.80M	41.80M	41.80M	-332.70M	-332.70M	263.00M

Lumentum Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 201.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 201.56 is above the 20-day moving average (MA) of 171.50, above the 50-day MA of 160.37, and above the 200-day MA of 100.77, indicating a bullish trend. The MACD of 12.11 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 85.19 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	―	$26.79B	196.16	4.96%	―	12.97%	4.71%
VIAV	―	$3.95B	269.41	2.13%	―	15.60%	―
PI	―	$6.20B	28,622.22	-7.49%	―	13.96%	-96.21%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
COMM	―	$3.73B	―	―	―	-11.03%	91.98%
EXTR	―	$2.48B	291.73	17.08%	―	14.31%	―
LITE	―	$14.29B	854.79	2.48%	―	21.03%	―

Lumentum Holdings Corporate Events

Lumentum Holdings Issues $1.265 Billion Convertible Notes

On September 8, 2025, Lumentum Holdings Inc. issued $1.265 billion in 0.375% Convertible Senior Notes due 2032. The proceeds will be used for capped call transactions, repurchasing existing notes, and general corporate purposes. The issuance is expected to impact Lumentum’s financial strategy by managing existing debt and potentially reducing stock dilution.

The most recent analyst rating on (LITE) stock is a Buy with a $145.00 price target. To see the full list of analyst forecasts on Lumentum Holdings stock, see the LITE Stock Forecast page.

Lumentum Holdings’ Earnings Call Highlights Robust Growth

Lumentum Holdings Inc. recently held its earnings call, revealing a strong performance in its Cloud & Networking segment. The company is experiencing robust growth, particularly in optical components and modules, which is driving profitability. Despite challenges in the Industrial Tech segment and supply constraints, the company’s positive momentum in cloud and AI markets suggests a promising future.

Lumentum Holdings Reports Strong Fiscal 2025 Results

Lumentum Holdings Inc., headquartered in San Jose, California, is a leading designer and manufacturer of optical and photonic products that facilitate optical networking and laser applications globally. The company plays a crucial role in telecom, enterprise, and data center networks, while also enabling advanced manufacturing techniques and next-generation imaging and sensing capabilities.