Lumentum (NASDAQ:LITE) Shares Gap Down - Here's Why

Key Points

• Lumentum shares gapped down at the open, falling from a prior close of $801.16 to an opening price of $777.58 before trading around $791.83.
• Despite the dip, analyst sentiment remains positive: multiple firms recently raised price targets, and the stock carries a Moderate Buy consensus with an average target of $1,021.95.
• The company’s latest earnings beat estimates with $2.37 EPS versus $2.27 expected, and revenue rose 90.1% year over year, though recent insider sales and the stock’s premium valuation may be weighing on sentiment.

Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report) shares gapped down prior to trading on Thursday . The stock had previously closed at $801.16, but opened at $777.58. Lumentum shares last traded at $791.8340, with a volume of 452,388 shares traded.

Analyst Upgrades and Downgrades

Several brokerages have commented on LITE. Craig Hallum increased their price target on Lumentum from $900.00 to $1,150.00 in a report on Wednesday, May 6th. Susquehanna boosted their price objective on shares of Lumentum from $550.00 to $1,100.00 and gave the stock a "positive" rating in a research note on Monday, April 20th. Needham & Company LLC reaffirmed a "buy" rating and set a $1,040.00 price objective on shares of Lumentum in a report on Tuesday, June 9th. Zacks Research upgraded shares of Lumentum from a "hold" rating to a "strong-buy" rating in a research note on Wednesday, May 13th. Finally, Stifel Nicolaus lifted their target price on shares of Lumentum from $800.00 to $1,100.00 and gave the stock a "buy" rating in a report on Tuesday, May 5th. One investment analyst has rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $1,021.95.

Lumentum Price Performance

The stock has a market cap of $58.47 billion, a price-to-earnings ratio of 139.41 and a beta of 1.48. The stock has a fifty day simple moving average of $897.63 and a 200-day simple moving average of $680.63. The company has a current ratio of 1.14, a quick ratio of 0.97 and a debt-to-equity ratio of 0.01.

Lumentum (NASDAQ:LITE - Get Free Report) last issued its quarterly earnings results on Tuesday, May 5th. The technology company reported $2.37 EPS for the quarter, topping the consensus estimate of $2.27 by $0.10. Lumentum had a return on equity of 24.81% and a net margin of 17.61%.The company had revenue of $808.40 million for the quarter, compared to the consensus estimate of $810.21 million. During the same period in the previous year, the business posted $0.57 EPS. The company's revenue for the quarter was up 90.1% on a year-over-year basis. Lumentum has set its Q4 2026 guidance at 2.850-3.050 EPS. As a group, equities research analysts expect that Lumentum Holdings Inc. will post 6.4 EPS for the current year.

Insider Buying and Selling at Lumentum

In related news, Director Brian Lillie sold 11,951 shares of the company's stock in a transaction on Monday, May 11th. The shares were sold at an average price of $981.64, for a total transaction of $11,731,579.64. Following the completion of the transaction, the director directly owned 13,959 shares in the company, valued at $13,702,712.76. This represents a 46.13% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Isaac Hosojiro Harris sold 4,000 shares of the stock in a transaction on Friday, May 29th. The shares were sold at an average price of $860.00, for a total transaction of $3,440,000.00. Following the completion of the sale, the director directly owned 8,400 shares of the company's stock, valued at approximately $7,224,000. This trade represents a 32.26% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 41,260 shares of company stock valued at $38,859,220 in the last three months. 0.43% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in the stock. Arrowstreet Capital Limited Partnership grew its position in Lumentum by 8,579.2% during the third quarter. Arrowstreet Capital Limited Partnership now owns 1,563,210 shares of the technology company's stock worth $254,350,000 after buying an additional 1,545,199 shares in the last quarter. Norges Bank bought a new stake in shares of Lumentum in the 4th quarter worth approximately $474,495,000. Value Aligned Research Advisors LLC bought a new stake in shares of Lumentum in the 4th quarter worth approximately $432,062,000. Situational Awareness LP lifted its position in shares of Lumentum by 210.9% in the 4th quarter. Situational Awareness LP now owns 1,298,400 shares of the technology company's stock worth $478,577,000 after acquiring an additional 880,800 shares during the period. Finally, Assenagon Asset Management S.A. grew its holdings in shares of Lumentum by 707.0% during the 4th quarter. Assenagon Asset Management S.A. now owns 994,478 shares of the technology company's stock worth $366,555,000 after purchasing an additional 871,249 shares in the last quarter. Institutional investors and hedge funds own 94.05% of the company's stock.

Lumentum Company Profile

Lumentum Holdings Inc, headquartered in San Jose, California, is a leading provider of photonic technologies that enable high-speed optical communication networks and advanced industrial applications. The company designs and manufactures a broad range of lasers, optical modules and subsystems tailored to the evolving requirements of telecommunications carriers, cloud data centers and enterprise networking.

Its core product portfolio includes tunable and fixed-wavelength laser transmitters, coherent optical engines, transceivers for long-haul, metro and data center interconnects, as well as test and measurement instruments.

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