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Lumentum Holdings (LITE)
NASDAQ:LITE
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Lumentum Holdings
(NASDAQ:LITE)
Rating:62Neutral
Price Target:
$82.00
▼(-0.56%Downside)
Positive Factors
Financial Performance
Lumentum Holdings Inc updated their outlook, raising the range for metrics across the board.
Revenue Growth
The company expects to achieve their $500MM Revenue target a quarter earlier than previously thought.
Negative Factors
Supply Chain Risks
Supply continues to be a gating factor with stretched cycle times and execution risks, while peers are aggressively expanding in an industry with relatively substitutable products.
Valuation Concerns
Valuation appears full at over 20 times FY26 earnings per share, considering the competitive nature of the business.
Lumentum Holdings (LITE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.72B
Dividend YieldN/A
Average Volume (3M)2.40M
Price to Earnings (P/E)―
Beta (1Y)2.62
Revenue Growth3.58%
EPS Growth-22.74%
CountryUS
Employees7,257
SectorTechnology
Sector Strength79
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.57
Shares Outstanding69,400,000
10 Day Avg. Volume2,248,328
30 Day Avg. Volume2,396,060
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)2.86
Price to Sales (P/S)0.00
P/FCF Ratio75.53
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit17.73
Enterprise Value/Ebitda-21.02
Forecast
1Y Price Target
$90.58Price Target Upside9.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Lumentum Holdings Business Overview & Revenue Model
Company DescriptionLumentum 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 MoneyLumentum Holdings generates revenue through the sale of its optical and photonic products to a diverse range of customers, including telecommunications companies, data center operators, and manufacturers of consumer electronics. Its key revenue streams include products for optical communications, such as transmission modules and amplifiers, and commercial lasers utilized in various industrial applications. The company also benefits from strategic partnerships and long-term supply agreements with major technology firms, contributing to stable and recurring revenue.
Lumentum Holdings Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q3-2025)
| % Change Since: 28.00%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects strong performance in the Cloud & Networking segment, with record EML chipset shipments and improved margins. However, there are challenges with tariff-related costs, a decline in the Industrial Tech segment, and supply constraints in telecom. The positive achievements in cloud and networking outweigh the lowlights.Q3-2025 Updates
Positive Updates
Exceeded Guidance for Revenue and EPS
In Q3, Lumentum exceeded the high end of guidance for both revenue and EPS, driven by strong demand from cloud customers and a recovering networking market.
Cloud & Networking Segment Growth
Revenue in the Cloud & Networking segment grew 8% sequentially and 16% year-over-year, fueled by robust demand from hyperscale cloud customers.
Record EML Chipset Shipments
Set another record for EML chipset shipments this quarter and remain on track to more than double this business by the end of 2025.
Non-GAAP Gross Margin Improvement
Non-GAAP gross margin was 35.2%, up 290 basis points sequentially and up 650 basis points year-on-year.
Non-GAAP Operating Margin Increase
Non-GAAP operating margin was 10.8%, up 290 basis points sequentially and up 1100 basis points year-on-year.
Transceiver Market Expansion
Accelerating optical transceiver production at the Thailand campus, with expectations for cloud transceiver revenue to grow over 50% sequentially in Q4.
Strong Demand for Datacom Products
Continued strong demand and supply constraints for EMLs, with plans to ramp CW laser production to meet additional market demand.
Negative Updates
Industrial Tech Segment Decline
Industrial Tech segment revenue decreased 5% sequentially, reflecting macroeconomic headwinds impacting Industrial laser demand and typical seasonal decline in 3D sensing revenue.
Tariff and Geopolitical Headwinds
Guidance includes a 100-basis-point reduction in overall company gross margin, driven by higher material costs and tariffs on shipments to U.S. destinations.
Supply Constraints in Telecom
Continued supply constraints in pumps, tunables, and CDM products, causing limitations on satisfying demand in the telecom product line.
Company Guidance
During Lumentum Holdings' third-quarter fiscal year 2025 earnings call, the company provided guidance reflecting their continued strong performance and growth expectations. They reported exceeding the high-end guidance for both revenue, which reached $425.2 million, and non-GAAP EPS, which was $0.57. The company highlighted robust demand in their Cloud & Networking segment, which saw an 8% sequential growth and a 16% year-over-year increase. They anticipate fourth-quarter revenue to range between $440 million and $470 million, with expectations of a 50% sequential growth in cloud transceiver revenue. Their non-GAAP gross margin improved to 35.2%, showing a 290 basis points sequential increase. Looking ahead, Lumentum expects to achieve quarterly revenue exceeding $500 million by the end of the calendar year, driven by strong cloud and AI demand despite potential macroeconomic uncertainties and tariff impacts.Lumentum Holdings Financial Statement Overview
Summary
Lumentum Holdings faces significant financial challenges with declining revenue, increased leverage, and net losses. Profitability and margins have deteriorated, and cash flow analysis indicates negative free cash flow, signaling operational and financial strain.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.45
Neutral
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.50
Neutral
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.40
Negative
| Breakdown | |||||
| TTM | Jun 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.47B | 1.36B | 1.77B | 1.71B | 1.74B | 1.68B | Gross Profit |
| 332.20M | 251.50M | 569.00M | 788.60M | 783.10M | 650.20M | EBIT |
| -268.00M | -434.00M | -115.70M | 147.10M | 152.90M | 55.90M | EBITDA |
| -700.00K | -110.70M | 167.40M | 482.40M | 706.90M | 419.40M | Net Income Common Stockholders |
| -439.90M | -546.50M | -131.60M | 198.90M | 397.30M | 135.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 866.70M | 887.00M | 2.01B | 2.55B | 1.95B | 1.55B | Total Assets |
| 3.98B | 3.93B | 4.63B | 4.16B | 3.55B | 3.29B | Total Debt |
| 2.61B | 2.56B | 2.87B | 1.94B | 1.24B | 1.19B | Net Debt |
| 2.09B | 2.12B | 2.01B | 645.80M | 465.60M | 890.70M | Total Liabilities |
| 3.10B | 2.97B | 3.28B | 2.29B | 1.58B | 1.54B | Stockholders Equity |
| 879.50M | 957.30M | 1.36B | 1.88B | 1.97B | 1.75B |
| Cash Flow | Free Cash Flow | ||||
| -29.80M | -111.30M | 51.30M | 368.10M | 653.90M | 438.30M | Operating Cash Flow |
| 97.80M | 24.70M | 179.80M | 459.30M | 738.70M | 524.30M | Investing Cash Flow |
| -52.20M | -114.30M | -874.00M | -226.30M | 1.00M | -987.70M | Financing Cash Flow |
| 45.80M | -332.70M | 263.00M | 282.90M | -263.40M | 328.80M |
Lumentum Holdings Technical Analysis
Positive
82.46
Price Trends
67.23
Positive
70.49
Positive
72.39
Positive
Market Momentum
4.01
Negative
63.66
Neutral
79.32
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 82.46 is above the 20-day moving average (MA) of 78.79, above the 50-day MA of 67.23, and above the 200-day MA of 72.39, indicating a bullish trend. The MACD of 4.01 indicates Negative momentum. The RSI at 63.66 is Neutral, neither overbought nor oversold. The STOCH value of 79.32 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
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $10.20B | 100.52 | 3.71% | ― | 2.86% | -29.92% | |
65 Neutral | $2.14B | ― | -78.83% | ― | -11.00% | -792.47% | |
62 Neutral | $11.80B | 10.10 | -7.47% | 2.99% | 7.37% | -8.16% | |
62 Neutral | $5.72B | ― | -42.79% | ― | 3.58% | -22.74% | |
60 Neutral | $2.05B | 437.14 | 0.71% | ― | 3.34% | ― | |
59 Neutral | $600.24M | ― | -66.95% | ― | -10.18% | 75.30% | |
59 Neutral | $3.03B | 58.72 | -0.78% | ― | 21.80% | 89.21% |
* Technology Sector Average
Performance Comparison
LITE
Lumentum Holdings
82.46
32.46
64.92%
ADTN
Adtran
7.50
2.57
52.13%
CIEN
Ciena
72.16
25.10
53.34%
EXTR
Extreme Networks
16.08
3.73
30.20%
VIAV
Viavi Solutions
9.18
1.70
22.73%
PI
IMPINJ
104.39
-46.75
-30.93%
Lumentum Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Lumentum Holdings Updates Revenue Guidance for June 2025
Positive
Jun 3, 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.
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.