| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 10 | — | 17.8x | Bottom tier | |
Growth | 98 | 83.2% | 7.1% | Top tier | |
Quality | 46 | 15.2% | 4.5% | Around median | |
Safety | 66 | — | 2.6x | Top tier | |
Capital Return | 80 | — | 2.12% | Top tier | |
Momentum | 92 | 495.6% | 2.9% | Top tier | |
Sentiment | 49 | 14 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Lumentum Holdings Inc. manufactures optical components and systems used to connect data centers, cloud computing networks, and artificial intelligence infrastructure. The company generates revenue through two main categories: components, including EML and CW laser chips, pump lasers, and ultra-high-power lasers, and systems, including 800G and 1.6T cloud transceivers and OCS products. In fiscal Q4 2026, components revenue was $649.4 million, or about 65% of the total, while systems revenue was $356.9 million, or about 35%.
Lumentum recorded fiscal Q4 2026 revenue of $1.01 billion, up 109% year over year, marking its eighth consecutive quarter of revenue growth and its third consecutive quarterly increase exceeding 20%. GAAP gross margin was 47.4%, and operating margin was 27.8%, while adjusted gross margin was 50.4% and adjusted operating margin was 36.6%. Adjusted net income reached $326.3 million, and adjusted earnings per share reached $3.23, but the exchange of a portion of the convertible notes resulted in a one-time non-cash accounting expense of $7.8 billion, leading to a GAAP net loss of $7.2 billion.
Growth was broad-based in fiscal Q4 2026; components revenue rose 103% year over year and 22% quarter over quarter, while systems revenue rose 123% year over year and 30% quarter over quarter. The results were supported by record shipments of 800G transceivers, the start of 1.6T module production, and a doubling of OCS shipments compared with the previous quarter, along with growth of more than 130% in narrow-linewidth laser assembly shipments and more than 80% in pump laser shipments year over year. Adjusted margin also improved due to higher factory utilization, a better product mix, and price increases on selected products.
The analyst consensus is "Buy," with an average price target of $1,080.6 and a wide range between $820 and $1,270; the average is very close to the 52-week range high of $1,085.68, compared with a low of $123.779. The breadth of the target range reflects substantial disagreement about the sustainability of the revenue and margin surge, particularly given the August 12, 2026 reference to a price-to-earnings ratio of 173.8 times and a price-to-sales ratio of 30.10 times. The valuation therefore rests on executing growth in 1.6T, OCS, and high-power lasers, while any setback in capacity or demand represents a clear risk to the elevated multiples.
Figures in the text are as of 2026-08-27; the live price is shown at the top of the page.
Revenue reached $1.01 billion, up 109% year over year, with the components category growing to $649.4 million and the systems category to $356.9 million. Shipments of narrow-linewidth laser assemblies rose more than 130%, and pump laser shipments rose more than 80% year over year. The company also recorded record shipments of 800G transceivers, began shipping 1.6T, and doubled OCS shipments compared with fiscal Q3 2026.
The company expects revenue of between $1.225 billion and $1.275 billion, and the midpoint of $1.25 billion indicates year-over-year growth exceeding 130%. It expects an adjusted operating margin of between 39.5% and 40.5% and adjusted earnings per share of between $4.05 and $4.35. The guidance assumes approximately 102 million diluted shares and an adjusted annual tax rate of 16.5%.
Most cloud transceiver shipments in fiscal Q4 2026 were 800G, but the company began shipping 1.6T modules as planned. It expects 1.6T adoption to accelerate in fiscal Q1 2027 and continue throughout calendar year 2027, driven by artificial intelligence clusters at hyperscale computing customers. Management says that the higher selling price of 1.6T modules and improvements in manufacturing yield and capacity utilization support the profitability of the transceiver product lines.
Automated analysis for informational purposes only — not investment advice.
The company expects demand for ultra-high-power laser chips to begin increasing in the second half of calendar year 2027, ahead of broader customer applications in calendar year 2028. It also received its first external order for an ELS module for delivery in the second half of calendar year 2027 and expected NPO to reach the market in late calendar year 2027 or during calendar year 2028. Management explains that NPO is an incremental opportunity, while CPO remains the natural end state on the technology roadmap.
Lumentum recorded adjusted net income of $326.3 million and adjusted earnings per share of $3.23 in fiscal Q4 2026. However, the exchange of a portion of the convertible notes resulted in a one-time non-cash accounting expense of $7.8 billion, bringing the GAAP net loss to $7.2 billion. The transaction reduced debt by about $1.1 billion, or approximately 35% of the outstanding convertible notes, making it necessary to separate the exceptional item from operating performance when assessing the results.
The first risk is that demand for EML and high-power lasers exceeds production capacity, although management says production ramp plans are on track. The company spent $167 million on capital expenditures in fiscal Q4 2026 and increased inventory by $59 million to support growth in its cloud and artificial intelligence business. It may also need additional supplies of indium phosphide substrates if demand continues to accelerate, alongside the potential entry of competing Chinese production capacity.
