Market News

Lumentum Partners with Hesai to Develop LiDAR Solutions

Optical and photonic products provider Lumentum Holdings Inc. (NASDAQ: LITE) recently revealed that it has entered into a partnership with light detection and ranging (LiDAR) sensors manufacturer Hesai to produce hybrid solid-state directional LiDAR solutions for advanced driver-assistance systems (ADAS).

Following the news, shares of the company declined 1.9% on Wednesday. However, the stock pared its losses slightly to close at $105.04 in the extended trading session.

Strategic Impact

With the prevalence of autonomous vehicles increasing by the day, LiDAR sensors have become an essential part of these vehicles. However, existing LiDAR sensors have been marked by high costs and poor manufacturability.

This is where Lumentum’s expertise in vertical-cavity surface-emitting laser (VCSEL) array light sources can significantly improve LiDAR cost competitiveness and scalability for ADASs.

Management Commentary

The CEO of Lumentum, Alan Lowe, said, “We are excited to leverage our leading-edge multi-junction VCSEL array capabilities and manufacturing scale in working with Hesai to help enable innovative, cost-effective, and high-volume LiDAR solutions.”

Price Target

Recently, Craig-Hallum analyst Richard Shannon reiterated a Buy rating on the stock. The analyst, however, raised the price target from $110 to $130, which implies upside potential of 23.8% from current levels.

Consensus among analysts is a Strong Buy based on 11 Buys and 2 Holds. The average Lumentum price target of $106.92 implies upside potential of 1.8% from current levels. Shares have gained 2.3% over the past year.

News Sentiment

News Sentiment for Lumentum is Neutral based on 3.75 articles over the past seven days. 50% of the articles have Bullish sentiment, compared to the sector average of 63%.

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