Lumentum Holdings Inc (LITE) stock analysis
Lumentum Holdings Inc (LITE) clears 1 of this site's 8 mechanical value filters, 1 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. At $752.54 it trades 1170.7% above this site's neutral DCF value (a margin of safety of -1170.7%). Its earnings quality rates Mixed and it returns −0.2% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Lumentum Holdings do?
Lumentum makes lasers and optical components used in data center networking, telecom networks and industrial and consumer devices.
What stands out about Lumentum Holdings?
- The share price implies more than 40% yearly growth. At $752.54, free cash flow per share would have to grow faster than 40% a year, fading to 2.5% by year 10, for this site's DCF to match the price. Change the assumptions.
- Misses 2 of the 8 value filters. It fails Price/Book < 8 (14.88) and Price/Sales < 7 (22.92); the other 1 pass and 5 were not evaluated. See every filter.
- Strongest against peers: revenue growth. At 83.2% (peer median 10.0%) it ranks 1st of 10 among telecom & communications stocks this site tracks. See the ranking.
- Weakest against peers: free-cash-flow yield. At 0.5% (peer median 3.6%) it ranks 10th of 10 among telecom & communications stocks this site tracks. See the ranking.
- Earnings quality: Mixed · 1 flag, 1 watch. accruals −133.4% of assets · stock comp 5.6% of revenue · share count +5.3% a year. From the latest 10-K (year to Jun 2026). See the Earnings Quality Screener.
How has Lumentum Holdings' share price moved?
The interactive price chart needs JavaScript.
Is Lumentum Holdings undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -1170.7%
- Wall St. analyst rating Buy · 4.09/5 34 analysts this month: 8 strong buy, 21 buy, 5 hold, 0 sell, 0 strong sell (Finnhub). Down from 4.11 last month.
- Earnings quality (is the profit real?) Mixed · 1 flag, 1 watch accruals −133.4% of assets · stock comp 5.6% of revenue · share count +5.3% a year. From the latest 10-K (year to Jun 2026) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) −0.2% net Latest fiscal year (2026): dividends 0.0% + buybacks 0.0% − stock comp 0.2%, as a share of today's market cap. Stock comp outruns what comes back in cash. Over 12 years its split-adjusted share count rose 27%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) Profit did not grow in 10 years Operating profit $55M → −$30M, capital needed $827M → $3.4B, 2017–2026 (3-year averages); return on capital now −1% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) n/a (no PEG reported)
- Compounder lenses (4) 0 of 4 · misses capital-light, real profit, cash back, price (n/a) Capital-light growth: not cleared (profit grew -0.5×, under 2×); Profit is real: not cleared (1 earnings-quality flag); Cash to owners: not cleared (−0.2% a year net); Fair price (PEG): cannot be measured (no PEG reported). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 3 flags
- Standing vs. sector peers 2 of 5 measures above the median Compared with the 9 other telecom & communications stocks this site tracks: 2 in the top third, 3 in the bottom third.
How does Lumentum Holdings compare with its peers?
2 of 5 measures sit above the median of the 9 other telecom & communications stocks tracked here, 2 in the top third and 3 in the bottom third.
- Free-cash-flow yieldhigher is cheaper · peer median 3.6% 0.5% ✕10th of 10
- Return on equityhigher is better · peer median 20% −300% ✕10th of 10
- Net marginhigher is better · peer median 14.3% −230.1% ✕10th of 10
- Revenue growthhigher is better, year on year · peer median 10.0% 83.2% ✓1st of 10
- Debt / equitylower is safer · peer median 1.03 0.35 ✓3rd of 10
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and LITE doesn't clear enough of it yet. In its favor: LITE carries a conservative amount of debt relative to equity. Where it comes up short: LITE isn't clearing the return-on-equity bar he'd want to see right now, and its five-year average return on equity falls short too, so this isn't just a one-off dip, runs thinner pretax margins than he'd like to see, hasn't grown earnings per share fast enough over five years to impress him, doesn't cover its interest expense as comfortably as he'd want, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✕
- ROE (5yr avg) > 11% ✕
- Debt/Equity < 0.5 ✓
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✕
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
Lynch looked for growth stories that weren't overpriced for that growth, and LITE falls short of his bar. In its favor: LITE isn't leaning on debt to fund that growth. Where it comes up short: LITE fails his signature PEG test, he'd call this pricey for the growth on offer, is growing earnings outside the 10–25% range he considered the sustainable sweet spot, is asking investors to pay a steep multiple for that growth, and isn't generating free cash flow to match the growth story.
- PEG < 1 n/a
- EPS growth 10%-25% ✕
- Debt/Equity < 0.5 ✓
- P/E < 27 n/a
- Price/FCF < 30 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Lumentum Holdings pass?
- Market Cap > $25B $69.1B
- Trailing P/E < 25 n/a
- PEG Ratio < 1.5 n/a
- Price/Book < 8 14.88
- Price/Sales < 7 22.92
- EPS Growth YoY > -5% n/a
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Lumentum Holdings' margin of safety?
History tracking starts this week - check back in a future week to see how this has moved.
Where is Lumentum Holdings in its 52-week range?
What is the short interest in Lumentum Holdings?
7,446,554 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Lumentum Holdings? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -651%
- Short interest under 5% of float 8.3%
- Passes most of the 6 fundamental filters 4/6 passed
- Price run-up backed by value, not just momentum +401% off 52wk low
- Debt/equity stable since 2017 0.74 → 0.35
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Lumentum Holdings shareholders gained per year?
Not enough clean earnings history to compute this for LITE yet - a loss year in the window breaks the growth math rather than faking a number through it.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from LITE's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Lumentum Holdings' 10-year financials show?
From LITE's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Lumentum Holdings
What kind of company is Lumentum Holdings?
Lumentum makes lasers and optical components used in data center networking, telecom networks and industrial and consumer devices. This site groups it with Communications stocks.
Is Lumentum Holdings trading above or below its DCF value?
At $752.54, LITE trades 1170.7% above this site's neutral DCF value of $59.22 per share, a margin of safety of −1170.7%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Lumentum Holdings pass?
LITE passes 1 of 8. It passes Market Cap > $25B ($69.1B). It misses Price/Book < 8 (14.88) and Price/Sales < 7 (22.92). Trailing P/E < 25, PEG Ratio < 1.5, EPS Growth YoY > -5%, vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
Are Lumentum Holdings's reported earnings reliable?
This site's earnings-quality check rates LITE Mixed · 1 flag, 1 watch. accruals −133.4% of assets · stock comp 5.6% of revenue · share count +5.3% a year. From the latest 10-K (year to Jun 2026). Concerns: stock-based compensation (on watch) and share dilution (flagged). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
When does Lumentum Holdings report earnings next?
Lumentum Holdings's next earnings report is expected on November 5, 2026 after the market closes, with analysts expecting earnings of $4.27 per share. Dates come from the Finnhub earnings calendar and can move. In its last 4 quarters it beat the estimate 4 times, by an average of +7.6%.
How heavily is Lumentum Holdings stock sold short?
As of September 30, 2026, 8.3% of LITE's float was sold short (7,446,554 shares, 1.5 days to cover), up 14.3% from the prior reporting period. FINRA publishes short interest twice a month, so it changes about every two weeks; this site flags anything above 5% of the float.
Where do these numbers come from?
- Financial statements: Lumentum Holdings's 10-K annual report for the year ended Jun 27, 2026, filed Aug 17, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Lumentum Holdings Inc analysis
This page shows every value-investing check the site runs on Lumentum Holdings Inc (LITE) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.