Lumentum Holdings Inc. (LITE)

Price$929.04Cached quoteAs of 2026-09-25 01:48 UTC

AI: Overvalued

Price checkLumentum’s growth is spectacular, but today’s price assumes exceptional expansion continues for years.

Lumentum closed at $827.60 on August 19, 2026, the latest completed regular session before this research time. Fiscal 2026 adjusted earnings were $8.67 per share, putting the stock near 95 times adjusted earnings. Even annualizing next quarter’s $4.05-$4.35 guidance midpoint gives $16.80 per share and a valuation around 49 times that much stronger run rate. Fiscal 2026 free cash flow, meaning operating cash after capital spending, was only about $300 million versus a common-stock market value around $73 billion. That offers almost no value-investor margin of safety.

Big pictureArtificial-intelligence networking has transformed revenue and margins, but optical demand has historically been highly cyclical.

Fiscal 2026 revenue surged 83% to $3.01 billion, while operating income swung from a $180 million loss to $525 million. Fourth-quarter revenue more than doubled to $1.01 billion and reported operating margin reached 27.8%. The $6.94 billion annual net loss is misleading for operating analysis because a one-time, non-cash $7.8 billion debt-extinguishment charge drove it. Cash improved too: operating cash flow rose from $126 million to $751 million. Still, optical-component demand can change rapidly when major cloud customers alter spending, inventories, or technology architectures.

Business strengthLiquidity improved greatly, but financing the expansion created substantial dilution and unusually complicated capital structure risks.

Lumentum ended June with about $2.74 billion of cash and short-term investments and $3.23 billion of debt, a much healthier net position than a year earlier. However, common shares outstanding jumped from 69.8 million to 88.6 million. Nvidia also purchased 2.88 million convertible preferred shares for $2 billion, and convertible notes add further potential shares, although capped-call hedges offset part of that dilution. Stock compensation was $170 million and there were no meaningful recent buybacks. The stronger balance sheet therefore came partly by giving new investors significant ownership.

What could change the storyFaster optical adoption could sustain the premium, while any slowdown in growth would expose severe valuation risk.

The bull case is unusually strong operationally: September-quarter guidance calls for $1.225-$1.275 billion of revenue, about 40% adjusted operating margin, and $4.05-$4.35 of adjusted earnings per share. New 1.6-terabit modules, optical circuit switches and advanced lasers could keep benefiting from artificial-intelligence data-center construction. The bear case is the price already anticipates much of that success. At roughly 49 times an annualized next-quarter earnings run rate, investors need rapid growth and elevated margins for several years. A return toward 10%-15% growth or ordinary optical-cycle margins could trigger major multiple compression.

AI: News

Record results and forecastLumentum more than doubled quarterly sales and forecast another major jump as artificial-intelligence optical demand accelerated.

On August 11, 2026, Lumentum reported fiscal fourth-quarter revenue of $1.01 billion, up 109%, and adjusted earnings of $3.23 per share versus $0.88 a year earlier. It forecast September-quarter revenue of $1.225-$1.275 billion and adjusted earnings of $4.05-$4.35. Shares closed 13.6% higher on August 12 at $932.47. The timing strongly supports earnings and guidance as important contributors, although the full price move cannot be attributed solely to the announcement.

Nasdaq index inclusionJoining the Nasdaq-100 created mandatory buying from index funds and reinforced enthusiasm around Lumentum’s rapid growth.

Nasdaq announced on May 8, 2026 that Lumentum would enter the Nasdaq-100 before trading on May 18. The index was tracked by more than 200 investment products with over $600 billion of assets, meaning index funds needed to add Lumentum shares. Barron’s reported the stock surged 17% to a record high on May 11. Index membership does not increase underlying profits, but forced purchases, higher visibility and momentum can materially affect the stock price independently of fundamental value.

Nvidia invests two billionNvidia committed major capital and future purchases, validating Lumentum’s technology while introducing meaningful shareholder dilution.

On March 2, 2026, Nvidia invested $2 billion in Lumentum through 2.88 million convertible preferred shares and entered multiyear agreements that include a multibillion-dollar purchase commitment and future capacity rights. Reuters reported Lumentum shares rose about 5% after the announcement. The agreement strengthens demand visibility and funds expanded United States manufacturing. The tradeoff is ownership dilution: the preferred shares can convert one-for-one into common stock, while Lumentum must successfully deploy substantial new capacity to earn attractive returns on the expansion.

Third-quarter expectations resetStrong growth still triggered a selloff in May, showing how demanding investor expectations have become.

On May 5, 2026, Lumentum reported third-quarter revenue of $808.4 million, up 90%, and adjusted earnings of $2.37 per share. It also projected fourth-quarter revenue around $960 million-$1.01 billion. Despite those extraordinary figures, the shares closed about 5.1% lower on May 6, according to Zacks. The reaction cannot be assigned to one factor, but contemporaneous reporting cited concerns about debt and whether unusually high margins were sustainable. That episode illustrates the valuation risk when excellent results merely meet elevated expectations.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013
Revenue	$3.01B	$1.65B	$1.36B	$1.77B	$1.71B	$1.74B	$1.68B	$1.57B	$1.25B	$1.00B	$903.0M	$837.1M	$817.9M	$769.9M
Gross profit	$1.26B	$459.9M	$251.5M	$569.0M	$788.6M	$783.1M	$650.2M	$425.9M	$432.1M	$318.1M	$277.3M	$257.9M	$256.6M	$222.8M
Gross margin	41.67%	27.96%	18.50%	32.20%	46.05%	44.93%	38.73%	27.21%	34.63%	31.76%	30.71%	30.81%	31.37%	28.94%
Research & development	$356.5M	$303.9M	$302.2M	$307.8M	$220.7M	$214.5M	$198.6M	$184.6M	$156.8M	$148.3M	$141.1M	$140.8M	$134.9M	$113.7M
Operating expenses	$731.1M	$640.0M	$685.5M	$684.7M	$485.3M	$256.1M	$446.1M	$447.5M	$292.2M	$270.5M	$265.8M	$281.3M	$247.9M	$218.9M
Operating income	$524.8M	−$180.1M	−$434.0M	−$115.7M	$303.3M	$527.0M	$204.1M	−$21.6M	$139.9M	$47.6M	$11.5M	−$23.4M	$8.7M	$3.9M
Operating margin	17.41%	−10.95%	−31.93%	−6.55%	17.71%	30.24%	12.16%	−1.38%	11.21%	4.75%	1.27%	−2.80%	1.06%	0.51%
EBITDA	$789.3M	$73.9M	−$172.8M	$118.6M	$470.4M	$704.1M	$396.0M	$135.9M	$217.1M	$108.6M	$66.1M	$27.6M	$53.5M	$49.9M
EBITDA margin	26.19%	4.49%	−12.71%	6.71%	27.47%	40.40%	23.59%	8.68%	17.40%	10.84%	7.32%	3.30%	6.54%	6.48%
Net income	−$6.94B	$25.9M	−$546.5M	−$131.6M	$198.9M	$397.3M	$135.5M	−$36.4M	$248.1M	−$102.5M	$21.0M	−$3.4M	$10.7M	—
Net profit margin	−230.10%	1.57%	−40.21%	−7.45%	11.61%	22.80%	8.07%	−2.33%	19.88%	−10.23%	2.33%	−0.41%	1.31%	—
Basic EPSper basic share	-$92.96	$0.38	-$8.12	-$1.93	$2.79	$5.27	$1.79	-$0.54	$3.88	-$1.71	-$0.05	-$0.06	$0.18	$0.11
Diluted EPSper diluted share	-$92.96	$0.37	-$8.12	-$1.93	$2.68	$5.07	$1.75	-$0.54	$3.82	-$1.71	-$0.05	-$0.06	$0.18	$0.11

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 17 reported holders of LITE
Holder	Shares held
LOWE ALAN S	230.47K
HURLSTON MICHAEL E.	124.42K
Retort Vincent	89.56K
Wupen Yuen	81.49K
Ali Wajid	60.95K
Sepe Matthew Joseph	41.51K
HERSCHER PENNY	41.44K
Kim Jae	32.33K
Small Ian	21.01K
Lillie Brian	13.91K
Johnson Julia Suzanne	13.32K
Fletcher Pamela	7.41K
Harris Isaac Hosojiro	6.98K
Chang Eric	5.01K
Lundstrom Paul	4.9K
COVERT HAROLD L	3.31K
Thad Trent	1.21K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 4 ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)163$106.14M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 2, 2026Form 4 · 10b5-1	Harris Isaac HosojiroDirector	SellCommon Stock	1.4K	$1.0K	$1.42M	7.0K
May 29, 2026Form 4 · 10b5-1	Harris Isaac HosojiroDirector	SellCommon Stock	4.0K	$860.00	$3.44M	8.4K
May 21, 2026Form 4	Small IanDirector	SellCommon Stock	5.0K	$868.07	$4.30M	21.0K
May 18, 2026Form 4 · 10b5-1	Retort VincentSEE REMARKS	SellCommon Stock	3.2K	$953.95	$3.04M	89.6K
May 18, 2026Form 4 · 10b5-1	Kim JaeSVP, GENERAL COUNSEL	SellCommon Stock	1.4K	$953.95	$1.36M	32.3K

Review ownership filings at SEC.gov ↗

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Lumentum Holdings Inc. (LITE)

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