Lumentum Holdings Inc.
Lumentum Holdings Inc. Fundamental Analysis
Lumentum Holdings Inc. (LITE) shows moderate financial fundamentals with a PE ratio of 186.36, profit margin of 11.95%, and ROE of 27.64%. The company generates $2.1B in annual revenue with strong year-over-year growth of 21.03%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 54.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LITE's fundamental strength across five key dimensions:
Efficiency Score
WeakLITE struggles to generate sufficient returns from assets.
Valuation Score
ModerateLITE shows balanced valuation metrics.
Growth Score
ModerateLITE shows steady but slowing expansion.
Financial Health Score
WeakLITE carries high financial risk with limited liquidity.
Profitability Score
ModerateLITE maintains healthy but balanced margins.
Key Financial Metrics
Is LITE Expensive or Cheap?
P/E Ratio
LITE trades at 186.36 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, LITE's PEG of 1.51 indicates fair valuation.
Price to Book
The market values Lumentum Holdings Inc. at 55.39 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 137.80 times EBITDA. This signals the market has high growth expectations.
How Well Does LITE Make Money?
Net Profit Margin
For every $100 in sales, Lumentum Holdings Inc. keeps $11.95 as profit after all expenses.
Operating Margin
Core operations generate 1.18 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.64 in profit for every $100 of shareholder equity.
ROA
Lumentum Holdings Inc. generates $5.24 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lumentum Holdings Inc. produces operating cash flow of $248.04M, showing steady but balanced cash generation.
Free Cash Flow
Lumentum Holdings Inc. produces free cash flow of $130.85M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.83 in free cash annually.
FCF Yield
LITE converts 0.27% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
186.36
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.51
vs 25 benchmark
P/B Ratio
Price to book value ratio
55.39
vs 25 benchmark
P/S Ratio
Price to sales ratio
22.37
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.95
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.28
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How LITE Stacks Against Its Sector Peers
| Metric | LITE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 186.36 | 35.19 | Worse (Expensive) |
| ROE | 27.64% | 1155.00% | Weak |
| Net Margin | 11.95% | -127067.00% (disorted) | Strong |
| Debt/Equity | 3.95 | 0.41 | Weak (High Leverage) |
| Current Ratio | 0.61 | 4.71 | Weak Liquidity |
| ROA | 5.24% | -314918.00% (disorted) | Weak |
LITE outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Lumentum Holdings Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.80%
Industry Style: Growth, Innovation, High Beta
GrowingEPS CAGR
-78.97%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-73.50%
Industry Style: Growth, Innovation, High Beta
Declining