Lumentum Holdings Inc. LITE
Lumentum's AI-driven optics inflection is undeniable: FY2026 revenue nearly doubled to $3.01B with operating income swinging to $524.8M from a $192.2M loss, and Q1 FY2027 guidance of ~$4.20 EPS midpoint implies the growth trajectory is accelerating. However, the stock at $968.90 trades at 23.9x trailing P/S — roughly 4x the peer median of 6.0x — while FY2026 GAAP net income was a catastrophic -$6.94B (EPS -$92.96), likely reflecting a massive non-cash impairment, and insiders have net sold $91.6M over 24 months.
The growth story is working, but the valuation prices in near-flawless execution and leaves no margin for error.
What could go wrong
- Valuation compression. At 23.9x P/S vs peer median 6.0x, any deceleration in the AI optics ramp or guide-down could trigger a sharp multiple contraction given the stock already trades 51% above its 50-day MA and 51% above its 200-day MA.
- Massive GAAP net loss. FY2026 net income of -$6.94B (EPS -$92.96) against $524.8M operating income signals a large non-operating charge — possibly a goodwill impairment — that raises questions about asset quality and the durability of reported equity value.
- Insider distribution. Insiders net sold $91.6M over 24 months with 138 dispositions vs 41 acquisitions; recent sales at $868–$1,000/share suggest management is monetizing the rally rather than accumulating.
- Customer concentration / AI capex cyclicality. The growth is concentrated in components for AI data center optics; any slowdown in hyperscaler capex or technology transition risk (e.g., competing interconnect standards) could materially impact the ramp.
What would change my mind
Where this comes from: FMP annual fundamentals FY2026 · FMP annual fundamentals FY2025 · peer_relative composite · insider summary 24-month window. Orin's read on LITE; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All LITE filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $4.4B | 0.1% of fund |
| Vanguard Portfolio Management | $3.5B | 0.2% of fund |
| Jpmorgan Chase & | $3.5B | 0.2% of fund |
| Fmr | $3.0B | 0.1% of fund |
| State Street | $3.0B | 0.1% of fund |
| Invesco | $2.7B | 0.2% of fund |
129 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 275 Form 4 filings, net −$311.3M. Of the 50 on hand, 0 were open-market purchases and 45 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about LITE
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/S | 24.19× | 3.24× | — |
| P/B | 15.1× | 3.0× | — |
Its P/E sits 20th percentile of its own last 5 years (−0.64σ from its own mean).
42.9%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.3B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$1092
$820 – $1270 · +18% against today's price
- 18 buy or overweight
- 7 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| LITELumentum Holdings Inc. | $73B | — | — | 41.7% | -230.1% | -300% |
| ENTGEntegris, Inc. | $23B | 75.5× | 30.5× | 45.5% | 9.2% | 8% |
| FFIVF5, Inc. | $26B | 35.9× | 25.3× | 82.2% | 22.0% | 20% |
| FNFabrinet | $14B | 30.3× | 25.3× | 12.0% | 10.2% | 21% |
| ZBRAZebra Technologies Corporation | $18B | 34.7× | 17.8× | 48.9% | 9.2% | 15% |
The median is of the 4 peers listed above and nothing else — check it against the column. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $-16 | $851.84 · −102% | 2026-06-10 |
| Levered DCF | $-6 | $851.84 · −101% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.