Lumentum Holdings Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Lumentum's AI-driven optical revenue inflection is undeniable — FY2026 revenue reached $3.01B (up 83.2% YoY) with operating income swinging to $524.8M from a $192.2M loss, and quarterly revenue accelerated from $533.8M in Q1 to $1.006B in Q4 FY2026 with operating margin reaching roughly 27% in that quarter.
However, at $1,048.60 the stock trades at 27.1x trailing P/S, roughly 383% above the peer median of 5.6x, while FY2026 GAAP net income was -$6.94B (EPS -$92.96) including a Q4 net loss of $7.16B that warrants scrutiny, and insiders have net sold $155M over 24 months with zero acquisitions and the CFO selling 24,542 shares at $1,048.50 on 1 Oct. The growth story is working but the valuation prices in near-flawless execution while insiders are aggressively distributing.
What could go wrong
- Extreme valuation. P/S of 27.1x is 383% above the peer median of 5.6x; any deceleration in revenue growth or margin compression could trigger a sharp re-rating lower.
- Q4 FY2026 massive net loss. Q4 FY2026 net income was -$7.16B (EPS -$95.40) despite positive operating income of $270.3M, suggesting a large non-cash impairment or charge that erodes book value.
- Persistent insider selling. Over 24 months, insiders executed 174 dispositions with zero acquisitions, net selling $155M in shares, with the CFO and a business unit president continuing to sell into October 2026.
- Sector profit-taking. Optics stocks are seeing profit-taking after extraordinary yearly gains, with LITE sliding 4% on 8 Oct alongside peers, suggesting momentum may be fading near highs.
What would change my mind
Where this comes from: FY26 fundamentals · Q4 FY26 results · peer comparison · insider trades, last 24 months. Orin's read on LITE; not advice.
How has the share price moved?
Up 347% over twelve months, from $193.80 on 27 Oct 2025 to $866.18 at the Tue 27 Oct 2026 close. Its highest close in that time was $1,133.40 on 6 Oct 2026; the last close is 23.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 22.9M, on 20 Mar 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All LITE filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $7.9B | 0.1% |
| Vanguard Capital Management | $4.4B | 0.1% |
| Vanguard Portfolio Management | $3.5B | 0.2% |
| JPMorgan Chase | $3.5B | 0.2% |
| FMR | $3.0B | 0.1% |
| State Street | $3.0B | 0.1% |
| Invesco | $2.7B | 0.2% |
| Geode Capital Management | $1.9B | 0.1% |
| Morgan Stanley | $1.1B | 0.1% |
| Norges Bank | $1.0B | 0.1% |
132 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 280 Form 4 filings; open-market trades net −$155.0M. Of the 50 on hand, 0 were open-market purchases and 47 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about LITE
Orin answers questions about LITE from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
It lost money over the last 12 months, so it has no P/E (Tue 27 Oct close). It is priced at 26.0× its yearly sales.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | lost money | — | 46.1× |
| P/S | 26.0× | — | — |
| P/B | 13.9×above usual | 3.6× | — |
- P/E: no usual level — it ran from 27.9× to 249× over its last 5 fiscal years, so a middle value says little.
- P/E: lost money — no P/E over the last 12 months.
- P/S: no usual level — it ran from 2.19× to 20.2× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $1,116 (from $820 to $1,270) — 29% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$1,116
$820 – $1,270 · +29% against the last close
- 11 buy or overweight
- 4 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
It lost money over the last 12 months, so it has no P/E. Only 2 of the 3 companies it is compared to made a profit (COHR 33.5×, IPGP 113×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| LITELumentum Holdings Inc. | $78B | lost money | — | 41.7% | −230.1% | −300% |
| AAOIApplied Optoelectronics, Inc. | $4B | lost money | n/m | 28.8% | −4.4% | −2% |
| COHRCoherent, Inc. | $33B | 33.5× | 21.1× | 38.2% | 12.2% | 9% |
| IPGPIPG Photonics Corporation | $3B | 113× | 26.0× | 38.4% | 2.6% | 1% |
- AAOI: lost money over the last 12 months, so no P/E.
- AAOI: EV/EBITDA is not meaningful (n/m) — its cash exceeds its market value plus debt, or the business lost money before depreciation.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
It has lost money and has no full fiscal year on file since its history starts, so it has no P/E history.
- Nowlost money
- Now: no P/E — it lost money over the last 12 months.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $40 a share — 95% below the $868.50 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Levered | $40 | 95% below $868.50 |
- Standard: comes out below zero, so it is not shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.