Lumentum Holdings Inc (LITE, Financial), a prominent player in the hardware industry, has recently experienced a notable surge in its stock price, with a 20.63% gain over the past week and a 14.35% increase over the last three months. Currently, the company boasts a market capitalization of $3.53 billion. According to GuruFocus's valuation metrics, Lumentum is fairly valued at $52.22, closely aligned with its GF Value of $50.98. This marks a significant shift from three months ago when it was considered a possible value trap at $72.89.
Overview of Lumentum Holdings Inc
Lumentum Holdings Inc, based in California, specializes in optical and photonic products used in various applications from telecommunications to commercial lasers. The company operates through two main segments: Optical Communications (OpComms) and Lasers. The OpComms segment, which generates the majority of the revenue, includes products for network applications in metro, long-haul, and submarine settings. Lumentum is also venturing into new optical technologies like 3-D sensing laser diodes for consumer electronics.
Assessing Profitability
Lumentum's Profitability Rank stands at 6/10. Despite challenging conditions, its operating margin of -22.31% is better than 12.94% of its peers. The company's ROE and ROA are -26.60% and -7.91% respectively, positioning it better than 11.55% and 17.76% of competitors in these metrics. Additionally, its ROIC of -13.17% surpasses 14.37% of industry counterparts. Over the past decade, Lumentum has been profitable for six years, showcasing its resilience amidst fluctuating market conditions.
Growth Trajectory
The company's Growth Rank is 5/10. Over the past three years, Lumentum has seen a revenue growth rate per share of 6.10%, outperforming 57.77% of its industry peers. Its 3-Year EPS without NRI growth rate stands at an impressive 34.20%, better than 78.24% of competitors. Over a five-year period, the EPS growth rate has been even more remarkable at 55.80%, placing Lumentum in the top 5.14% of its industry.
Key Stakeholders
Notable investors in Lumentum include Steven Cohen (Trades, Portfolio), who holds 3,382,398 shares, representing a 5% stake in the company. Following him are Ken Fisher (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio), holding 579,379 and 183,665 shares respectively. These significant investments reflect confidence in Lumentum's market strategy and future prospects.
Competitive Landscape
Lumentum operates in a competitive industry, with key rivals including Extreme Networks Inc (EXTR, Financial) with a market cap of $1.93 billion, Belden Inc (BDC, Financial) at $4.06 billion, and Viasat Inc (VSAT, Financial) valued at $2.19 billion. These companies, along with Lumentum, form a dynamic market environment with continuous innovations and strategic shifts.
Conclusion
Lumentum Holdings Inc has demonstrated a robust market position and financial health, underscored by its recent stock performance. The company's strategic focus on high-growth areas like 3-D sensing technologies, combined with its solid financial metrics and strong investor backing, positions it well for future growth. As the market continues to evolve, Lumentum's adaptability and innovation will be crucial in maintaining its competitive edge and delivering value to its shareholders.
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.
