Lumentum Holdings Inc (LITE, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a market capitalization of $4 billion, the company's current stock price stands at $59.73. Over the past week, LITE has seen a slight decline of 2.34%, yet this short-term loss is overshadowed by a significant gain of 30.03% over the past three months. Despite this impressive surge, the GF Value of $84.21 suggests that the stock may be undervalued, although it has decreased from a past GF Value of $89.56. The current and past GF Valuation both indicate a "Possible Value Trap, Think Twice" status, urging investors to exercise caution.
Introduction to Lumentum Holdings Inc
Lumentum Holdings Inc, operating within the hardware industry, is a California-based technology firm specializing in optical and photonic products. These products are essential for a variety of applications, including telecommunications networking equipment and commercial lasers used in manufacturing, inspection, and life-science labs. The company's business is divided into two segments: OpComms and Lasers, with the former being the primary revenue generator. Lumentum is also venturing into new optical applications such as 3-D sensing laser diodes for consumer electronics. 
Assessing Profitability
Lumentum's Profitability Rank stands at 6/10, reflecting a moderate level of profitability within its industry. The company's Operating Margin is currently at -11.42%, which, while negative, fares better than 18.56% of 2,451 companies in the same sector. Its Return on Equity (ROE) is -13.68%, surpassing 16.41% of its peers. The Return on Assets (ROA) at -4.46% and Return on Invested Capital (ROIC) at -7.98% also indicate that Lumentum is performing better than 23.11% and 19.47% of companies, respectively. Over the past decade, Lumentum has maintained profitability for six years, which is more favorable than 37.9% of its industry counterparts. 
Growth Trajectory of Lumentum Holdings
The company's Growth Rank is an impressive 8/10, indicating strong growth relative to the industry. Lumentum's 3-Year Revenue Growth Rate per Share is 6.10%, outperforming 54.55% of 2,321 companies. Its 5-Year Revenue Growth Rate per Share is 4.40%, which is better than 55.41% of 2,144 companies. However, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is a modest 0.27%, surpassing 18.58% of the industry. The 3-Year EPS without NRI Growth Rate stands at a robust 34.20%, and the 5-Year EPS without NRI Growth Rate is even more impressive at 55.80%, indicating strong earnings growth. 
Notable Shareholders in Lumentum Holdings
Among the notable shareholders of Lumentum Holdings Inc, Ken Fisher (Trades, Portfolio) holds 672,991 shares, representing a 1% stake in the company. Jim Simons (Trades, Portfolio) follows with 553,200 shares, accounting for 0.83%, and Steven Cohen (Trades, Portfolio) holds 126,724 shares, which equates to a 0.19% share percentage. The investment decisions of these prominent investors are significant indicators of the company's perceived value and potential.
Competitive Landscape
When compared to its competitors, Lumentum Holdings Inc stands out with a market capitalization of $4 billion. Extreme Networks Inc (EXTR, Financial) has a market cap of $1.59 billion, Belden Inc (BDC, Financial) is valued at $3.09 billion, and Viasat Inc (VSAT, Financial) holds a market cap of $2.76 billion. These figures place Lumentum at the higher end of the spectrum in terms of market capitalization within its industry.
Conclusion
In summary, Lumentum Holdings Inc's recent stock performance has been a mix of short-term losses and significant quarterly gains. The company's valuation, as indicated by the GF Value, suggests potential undervaluation but also warrants caution due to the "Possible Value Trap" status. Lumentum's position within the hardware industry is solid, with a strong Growth Rank and a history of profitability. The involvement of notable shareholders like Ken Fisher (Trades, Portfolio), Jim Simons (Trades, Portfolio), and Steven Cohen (Trades, Portfolio) adds a layer of investor confidence. Finally, when compared to its competitors, Lumentum's market capitalization suggests a strong industry standing, which, coupled with its growth prospects, may continue to attract investor interest.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
