Lumentum (NASDAQ:LITE) Shares Gap Up - Should You Buy?

Key Points

• Lumentum shares gapped up from a prior close of $693.24 to open at $748.00, later trading near $709.30, with more than 1.47 million shares changing hands.
• Analyst sentiment remains positive overall, with 14 Buy ratings and seven Holds producing a “Moderate Buy” consensus and an average price target of $1,012.67, despite one recent downgrade to Hold.
• Lumentum beat quarterly earnings expectations, reporting $2.37 in EPS versus $2.27 expected, while revenue rose 90.1% year over year. However, insiders sold about $38.9 million in stock during the last quarter.

Shares of Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report) gapped up before the market opened on Friday . The stock had previously closed at $693.24, but opened at $748.00. Lumentum shares last traded at $709.3010, with a volume of 1,473,327 shares changing hands.

Analysts Set New Price Targets

Several equities research analysts recently issued reports on LITE shares. Zacks Research cut shares of Lumentum from a "strong-buy" rating to a "hold" rating in a research report on Monday, July 6th. Jefferies Financial Group reiterated a "buy" rating and issued a $1,200.00 target price on shares of Lumentum in a report on Wednesday, May 6th. Citigroup reissued a "buy" rating on shares of Lumentum in a research note on Thursday, July 16th. Barclays raised their price target on shares of Lumentum from $750.00 to $1,000.00 and gave the stock an "equal weight" rating in a report on Wednesday, May 6th. Finally, Craig Hallum lifted their price target on shares of Lumentum from $900.00 to $1,150.00 in a research report on Wednesday, May 6th. Fourteen analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $1,012.67.

Lumentum Price Performance

The company has a quick ratio of 0.97, a current ratio of 1.14 and a debt-to-equity ratio of 0.01. The company has a market cap of $55.67 billion, a price-to-earnings ratio of 132.81 and a beta of 1.48. The stock's 50-day simple moving average is $825.72 and its 200 day simple moving average is $736.71.

Lumentum (NASDAQ:LITE - Get Free Report) last announced its quarterly earnings results on Tuesday, May 5th. The technology company reported $2.37 earnings per share for the quarter, beating analysts' consensus estimates of $2.27 by $0.10. The business had revenue of $808.40 million during the quarter, compared to analysts' expectations of $810.21 million. Lumentum had a net margin of 17.61% and a return on equity of 24.81%. The business's revenue for the quarter was up 90.1% on a year-over-year basis. During the same period last year, the business earned $0.57 earnings per share. Lumentum has set its Q4 2026 guidance at 2.850-3.050 EPS. On average, equities research analysts anticipate that Lumentum Holdings Inc. will post 6.42 EPS for the current fiscal year.

Insider Buying and Selling

In other Lumentum news, SVP Jae Kim sold 1,422 shares of the company's stock in a transaction on Monday, May 18th. The stock was sold at an average price of $953.95, for a total transaction of $1,356,516.90. Following the transaction, the senior vice president directly owned 32,333 shares in the company, valued at $30,844,065.35. This represents a 4.21% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Ian Small sold 4,954 shares of the firm's stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $868.07, for a total value of $4,300,418.78. Following the transaction, the director owned 21,008 shares of the company's stock, valued at approximately $18,236,414.56. This represents a 19.08% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 41,260 shares of company stock valued at $38,859,220 over the last quarter. 0.43% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Lumentum

Institutional investors have recently bought and sold shares of the company. Advisors Asset Management Inc. boosted its stake in shares of Lumentum by 36.8% in the first quarter. Advisors Asset Management Inc. now owns 945 shares of the technology company's stock valued at $59,000 after purchasing an additional 254 shares during the period. NewEdge Advisors LLC lifted its holdings in Lumentum by 109.9% during the 1st quarter. NewEdge Advisors LLC now owns 11,986 shares of the technology company's stock worth $747,000 after buying an additional 6,275 shares in the last quarter. Empowered Funds LLC lifted its holdings in Lumentum by 9.1% during the 1st quarter. Empowered Funds LLC now owns 8,139 shares of the technology company's stock worth $507,000 after buying an additional 680 shares in the last quarter. Hsbc Holdings PLC purchased a new stake in shares of Lumentum during the second quarter worth $298,000. Finally, Arrowstreet Capital Limited Partnership purchased a new stake in shares of Lumentum during the second quarter worth $1,712,000. 94.05% of the stock is owned by institutional investors and hedge funds.

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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