Lumentum Holdings (LITE) AI Stock Analysis

• Market Cap: $13.36B
• Dividend Yield: N/A
• Average Volume (3M): 3.17M
• Price to Earnings (P/E): 798.8
• Beta (1Y): 2.64
• Revenue Growth: 33.62%
• EPS Growth: N/A
• Country: US
• Employees: 7,257
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 1.10
• Shares Outstanding: 70,912,590
• 10 Day Avg. Volume: 3,863,269
• 30 Day Avg. Volume: 3,171,143
• 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: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $203.00
• Price Target Upside: 7.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $198.00 ▲(5.12% Upside)

Lumentum Holdings' overall stock score is driven by strong technical momentum and positive earnings call insights, despite financial challenges and high valuation concerns. The company's growth in AI and cloud infrastructure is a significant strength, but financial instability and high leverage pose risks.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong demand for Lumentum's products, particularly in AI and cloud infrastructure, suggesting robust market positioning and potential for sustained growth.

Market Expansion

Increasing manufacturing capacity positions Lumentum to meet growing demand, particularly in high-speed optical transceivers, supporting long-term revenue growth and market expansion.

Product Innovation

Continued innovation in high-speed optical transceivers and systems products enhances Lumentum's competitive edge, driving growth in cloud and AI markets and ensuring long-term relevance.

Negative Factors

Financial Leverage

High leverage may limit financial flexibility and increase risk, potentially impacting Lumentum's ability to invest in growth opportunities and weather economic downturns.

Profitability Challenges

Negative profitability metrics highlight operational inefficiencies, which could hinder Lumentum's ability to generate sustainable profits and reinvest in business growth.

Cash Flow Issues

Weak cash flow generation limits Lumentum's ability to fund operations and strategic initiatives, posing a risk to financial stability and long-term growth prospects.

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 faces significant financial challenges. Despite revenue growth, profitability and cash flow metrics indicate operational and financial difficulties. High leverage and low returns on equity further exacerbate the company's 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 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: 188.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 188.36 is above the 20-day moving average (MA) of 178.50, above the 50-day MA of 165.43, and above the 200-day MA of 102.46, indicating a bullish trend. The MACD of 14.16 indicates Negative momentum. The RSI at 71.78 is Negative, neither overbought nor oversold. The STOCH value of 72.75 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	70 Outperform	$25.79B	188.88	4.96%	―	12.97%	4.71%
VIAV	68 Neutral	$3.74B	255.10	2.13%	―	15.60%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
COMM	61 Neutral	$3.53B	―	―	―	9.86%	99.11%
LITE	60 Neutral	$13.36B	798.81	13.42%	―	33.62%	―
EXTR	58 Neutral	$2.38B	280.31	17.08%	―	14.31%	―
PI	56 Neutral	$5.29B	―	-7.49%	―	4.24%	-141.83%

Lumentum Holdings Corporate Events

Lumentum Holdings Reports Strong Q1 2026 Results

Lumentum Holdings Inc., headquartered in San Jose, California, is a leading designer and manufacturer of optical and photonic products that enable optical networking and laser applications globally, serving markets such as telecom, enterprise, and data centers.

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.