One-glance verdict
Overvalued
$112.97 our estimate vs market $824.13
Wall Street consensus: $1,179.07 (943.7% higher than our fair-value estimate)
630% above our estimate, beyond the bull case
Fundamentals snapshot
Lumentum Holdings Inc.
LITE · NMS · Technology · Communication Equipment
Current price
$824.13
52-week range
$152.54 - $1,143.00
Market cap
$74.65B
Balance sheet
Healthy
24.60x Strong cushion
Net cash $1.07B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 83.2% last year.
- Reward Free cash flow was positive in 7/10 years.
- Risk Return on equity was -240.0% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 0.3% (peer median: 2.5%).
What this company does
Lumentum Holdings Inc.
Lumentum makes high-tech parts that use lasers and light to transmit information for things like the internet, 5G networks, and AI data centers. The company makes most of its money selling these critical components to large telecommunications and technology firms building the infrastructure that powers our digital world. As global demand for faster and more reliable data communication grows, Lumentum's products serve as essential building blocks for that expansion.
How the company got here
Lumentum was created in 2015 when a larger technology company, JDS Uniphase, decided to split into two separate, more focused businesses. Lumentum became the company dedicated to making optical and laser-based products. To grow and strengthen its technology, it later bought other companies like Oclaro in 2018 and NeoPhotonics in 2022, which expanded its capabilities in high-speed data transmission. More recently, in 2023, it acquired Cloud Light to better serve the needs of massive cloud data centers, especially as the demand for artificial intelligence (AI) has grown.
What it actually does
Lumentum creates products that control and manipulate light, known as optical and photonic products. Think of them as essential components inside the complex systems that make the internet, cloud computing, and advanced manufacturing work. For example, their technology helps move massive amounts of data through fiber optic cables for everything from streaming movies to powering AI applications. They also make high-precision lasers used in factories to cut and shape materials for products like semiconductors and electric vehicle batteries.
Cloud & Networking
This is Lumentum's largest and most strategically important business segment. It makes the tiny, high-performance components that send and receive information as light through fiber optic networks. Its customers are companies that build networking equipment and operate massive data centers, the physical heart of the cloud and AI services. As the demand for faster internet and more powerful AI has exploded, this part of the company has grown significantly by supplying the critical parts needed to move data at incredible speeds.
Industrial Tech
This segment produces a wide variety of lasers for industrial and manufacturing purposes. These aren't laser pointers; they are powerful and precise tools used for tasks like cutting microchips, welding metals, and structuring batteries with extreme accuracy. This division also creates components for 3D sensing technology, which allows devices like smartphones to recognize faces or map a room. While a smaller part of the company's business, it provides important technology to the manufacturing and consumer electronics industries.
What management is betting on now
Management is heavily focused on the explosive growth of artificial intelligence and cloud computing. They are investing heavily in manufacturing capacity to supply the high-speed optical components that connect the powerful computer chips (GPUs) used in AI data centers. The company sees a major industry shift from using traditional copper wires to using light-based connections (optics) for even very short distances inside data centers, as copper is hitting its physical limits. By partnering with major AI players like NVIDIA and expanding its US-based manufacturing, Lumentum aims to be a critical supplier for the infrastructure that powers the AI economy.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$-34.50M
FY2025 Q2
$-15.90M
FY2025 Q3
$-64.40M
FY2025 Q4
$10.10M
FY2026 Q1
$-18.30M
FY2026 Q2
$43.10M
FY2026 Q3
$79.10M
FY2026 Q4
$196.20M
Revenue
$3.01B
Net income
$-7.16B
Diluted EPS
-95.40
Operating cash flow
$363.00M
Free cash flow
$196.20M
Fetching…
Sources
Revenue
—
Net income
$144.20M
Diluted EPS
1.50
Operating cash flow
$203.80M
Free cash flow
$79.10M
Fetching…
Sources
Revenue
—
Net income
$78.20M
Diluted EPS
0.89
Operating cash flow
$126.70M
Free cash flow
$43.10M
Fetching…
Sources
Revenue
—
Net income
$4.20M
Diluted EPS
0.05
Operating cash flow
$57.90M
Free cash flow
$-18.30M
Fetching…
Sources
Revenue
$480.70M
Net income
$213.30M
Diluted EPS
3.10
Operating cash flow
$64.00M
Free cash flow
$10.10M
Fetching…
Sources
Revenue
$425.20M
Net income
$-44.10M
Diluted EPS
-0.64
Operating cash flow
$-1.60M
Free cash flow
$-64.40M
Fetching…
Sources
Revenue
$402.20M
Net income
$-60.90M
Diluted EPS
-0.88
Operating cash flow
$24.30M
Free cash flow
$-15.90M
Fetching…
Sources
Revenue
$336.90M
Net income
$-82.40M
Diluted EPS
-1.21
Operating cash flow
$39.60M
Free cash flow
$-34.50M
Fetching…
Sources
Is it cheap or expensive?
Fair value $112.97 vs current price $824.13
Wall Street consensus is the average analyst price target: $1,179.07 (943.7% higher than our fair-value estimate).
Our most-likely fair value is $112.97 a share — about 86.3% below today's price of $824.13, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $1.1B - more cash than debt. Interest coverage 24.6x.
Net debt
$-1.07B
Interest coverage
24.60x
Lumentum Holdings Inc.'s profit covers its interest bill about 24.6 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
LITE
BASELINE
Lumentum Holdings Inc.
Total debt $1.67B Interest coverage 24.60x This is the baseline the peer rows are being compared against.
Total debt $3.55B Interest coverage 4.74x -81% vs LITE Carries about 5.2x less debt cushion than LITE.
Total debt $3.29B Interest coverage 3.39x -86% vs LITE Carries about 7.3x less debt cushion than LITE.
Total debt $4.01M Interest coverage 5,511.95x +22,310% vs LITE Carries about 224.1x more debt cushion than LITE.
Total debt $300.14M Interest coverage -14.22x -100% vs LITE This peer has almost no interest-payment cushion compared with LITE.
What you should know
The case for and against LITE
2 Rewards
2 Risks
Rewards
-
Revenue grew 83.2% last year.
-
Free cash flow was positive in 7/10 years.
Risks
-
Return on equity was -240.0% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 0.3% (peer median: 2.5%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
22.88x
P/B
15.72x
P/S
24.77x
EV/EBITDA
90.99x
PEG ratio
0.63x
Profitability
How much profit each dollar creates
Gross margin
44.2%
Operating margin
28.0%
Net margin
-230.1%
ROE
-240.0%
ROA
5.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.36x
Current ratio
1.68x
Quick ratio
1.32x
Total debt
$1.67B
Total cash
$2.74B
Growth
How the business has been compounding
Revenue TTM
$4.32B
Revenue 5Y CAGR
15.2%
EPS TTM
-92.96
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$751.40M
Free CF TTM
$300.10M
FCF margin
6.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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