Last Updated: 08 Nov 2024
Executive Summary
Lumentum Holdings Inc. (LITE) is a leading manufacturer of optical and photonic products. The company's stock price has been volatile in recent months, but it has outperformed the broader market over the past year. Lumentum is currently trading at $73.64, which is below its 52-week high of $73.90. The company has a market capitalization of $5.05 billion and a P/E ratio of none.
Company Overview
Lumentum was founded in 1999 and is headquartered in San Jose, California. The company designs, manufactures, and sells optical and photonic products used in a variety of applications, including telecommunications, data communications, and industrial lasers. Lumentum has a global presence with operations in the Americas, Asia-Pacific, Europe, the Middle East, and Africa.
Fundamental Analysis
Lumentum's financial performance has been mixed in recent quarters. The company reported a loss of $82.6 million in the most recent quarter, which was wider than the loss of $72.2 million in the same quarter last year. Revenue declined by 16.9% to $1.36 billion. Despite the challenging environment, Lumentum's gross profit margin improved to 62.7% from 60.9% in the same quarter last year.
Lumentum's balance sheet is strong. The company has $1.2 billion in cash and equivalents and no long-term debt. Lumentum's return on equity is -47.2%, which is below the industry average of 10.2%.
Technical Analysis
Lumentum's stock price has been in a downtrend since reaching a 52-week high of $73.90 in August 2022. The stock is currently trading below its 50-day and 200-day moving averages. The relative strength index (RSI) is at 45.7, which indicates that the stock is oversold.
Short Term Outlook
Lumentum's stock price is likely to remain volatile in the short term. The company faces challenges from the global economic slowdown and the ongoing trade war between the United States and China. However, Lumentum's strong balance sheet and improving gross profit margin should provide some support for the stock price.
Long Term Outlook
Lumentum is well-positioned for long-term growth. The company is a leader in the optical and photonic products market, and its products are used in a variety of high-growth applications. Lumentum's strong balance sheet and experienced management team should enable the company to navigate the current challenges and emerge as a stronger company in the long term.
Analyst Recommendations
The consensus analyst rating for Lumentum is "buy." The average analyst target price is $63.63, which represents a potential upside of 13.6% from the current price. Two analysts have a "strong buy" rating on the stock, eight have a "buy" rating, five have a "hold" rating, and two have a "sell" rating.
