Lumentum Holdings (LITE) AI Stock Analysis

• Market Cap: $11.45B
• Dividend Yield: N/A
• Average Volume (3M): 3.80M
• Price to Earnings (P/E): 694.7
• Beta (1Y): 2.61
• 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: 69,900,000
• 10 Day Avg. Volume: 3,242,217
• 30 Day Avg. Volume: 3,798,573
• 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: 0.75
• Enterprise Value/Revenue: 5.20
• Enterprise Value/Gross Profit: 18.60
• Enterprise Value/Ebitda: 80.16
• 1Y Price Target: $143.88
• Price Target Upside: -12.17% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 59 Neutral
• Price Target: $171.00 ▲(4.39% Upside)

Lumentum Holdings' overall score reflects significant financial challenges, despite strong technical momentum and positive earnings call guidance. The high P/E ratio suggests overvaluation, while the absence of corporate events limits additional insights.

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. (NASDAQ: LITE) is a leading provider of optical and photonic products for a diverse range of applications, including telecommunications, data communications, and industrial markets. The company operates primarily within two segments: Optical Communications and Commercial Lasers. Lumentum's core products include lasers, optical components, and modules that enable high-speed data transmission and advanced manufacturing processes. The company's innovations facilitate the evolution of networks and enhance system performance across a variety of industries.

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 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 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.65B	1.65B	1.36B	1.77B	1.71B	1.74B
Gross Profit	459.90M	459.90M	251.50M	569.00M	788.60M	783.10M
EBITDA	106.70M	104.10M	-110.70M	167.40M	482.40M	706.90M
Net Income	25.90M	25.90M	-546.50M	-131.60M	198.90M	397.30M
Balance Sheet
Total Assets	4.22B	4.22B	3.93B	4.63B	4.16B	3.55B
Cash, Cash Equivalents and Short-Term Investments	877.10M	877.10M	887.00M	2.01B	2.55B	1.95B
Total Debt	2.61B	2.61B	2.56B	2.87B	1.94B	1.24B
Total Liabilities	3.08B	3.08B	2.97B	3.28B	2.29B	1.58B
Stockholders Equity	1.13B	1.13B	957.30M	1.36B	1.88B	1.97B
Cash Flow
Free Cash Flow	-104.70M	-104.70M	-111.30M	51.30M	368.10M	653.90M
Operating Cash Flow	126.30M	126.30M	24.70M	179.80M	459.30M	738.70M
Investing Cash Flow	-84.10M	-84.10M	-114.30M	-874.00M	-226.30M	1.00M
Financing Cash Flow	41.80M	41.80M	-332.70M	263.00M	282.90M	-263.40M

Lumentum Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 163.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 163.81 is above the 20-day moving average (MA) of 163.44, above the 50-day MA of 136.97, and above the 200-day MA of 92.21, indicating a bullish trend. The MACD of 8.23 indicates Positive momentum. The RSI at 58.74 is Neutral, neither overbought nor oversold. The STOCH value of 74.49 is Neutral, 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	76 Outperform	$21.36B	156.42	4.96%	―	12.97%	4.71%
PI	68 Neutral	$5.39B	25,720.83	0.42%	―	13.96%	-96.21%
VIAV	65 Neutral	$2.84B	82.81	4.76%	―	8.39%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EXTR	61 Neutral	$2.71B	―	-16.44%	―	2.05%	91.37%
LITE	59 Neutral	$11.45B	694.70	2.48%	―	21.03%	―
COMM	58 Neutral	$3.44B	―	17.08%	―	-11.03%	91.98%

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.