Lumentum (NASDAQ:LITE) Shares Gap Up - Still a Buy?

Key Points

• Lumentum shares gapped up ahead of the open, climbing from a prior close of $707.10 to an opening price of $755.16 and last trading near $796.92, on heavy volume.
• Several analysts raised price targets sharply on the stock, including UBS to $960, Craig Hallum to $1,150, and BNP Paribas Exane to $1,300, with the consensus rating remaining Moderate Buy.
• The company reported better-than-expected quarterly EPS of $2.37 and 90.1% revenue growth year over year, while institutional investors continued to build positions and insiders recently sold shares under pre-arranged plans.

Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report)'s share price gapped up before the market opened on Thursday . The stock had previously closed at $707.10, but opened at $755.16. Lumentum shares last traded at $796.9180, with a volume of 1,467,612 shares.

Analyst Ratings Changes

A number of research firms have issued reports on LITE. UBS Group raised their target price on Lumentum from $455.00 to $960.00 and gave the stock a "neutral" rating in a research report on Wednesday, May 6th. Weiss Ratings reiterated a "hold (c)" rating on shares of Lumentum in a research note on Tuesday, April 21st. Craig Hallum increased their target price on Lumentum from $900.00 to $1,150.00 in a research report on Wednesday, May 6th. Morgan Stanley raised their price target on Lumentum from $710.00 to $900.00 and gave the stock an "equal weight" rating in a report on Wednesday, May 6th. Finally, BNP Paribas Exane boosted their price objective on Lumentum from $1,040.00 to $1,300.00 in a research note on Wednesday, May 6th. Fourteen analysts have rated the stock with a Buy rating and seven have assigned a Hold rating to the company. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average target price of $1,021.95.

Lumentum Trading Up 11.4%

The firm has a market cap of $61.27 billion, a P/E ratio of 145.52 and a beta of 1.48. The company has a debt-to-equity ratio of 0.01, a current ratio of 1.14 and a quick ratio of 0.97. The stock has a 50 day moving average of $883.55 and a 200 day moving average of $694.44.

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

Insiders Place Their Bets

In other Lumentum news, SVP Jae Kim sold 1,422 shares of the stock in a transaction that occurred on Monday, May 18th. The shares were 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 trade represents a 4.21% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 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, insider Vincent Retort sold 3,183 shares of Lumentum stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $953.95, for a total transaction of $3,036,422.85. Following the transaction, the insider directly owned 89,563 shares in the company, valued at $85,438,623.85. This trade represents a 3.43% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 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. Insiders have sold 41,260 shares of company stock valued at $38,859,220 over the last 90 days. Company insiders own 0.43% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the stock. Arrowstreet Capital Limited Partnership boosted its stake in shares of 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 valued at $254,350,000 after purchasing an additional 1,545,199 shares during the period. Norges Bank purchased a new position in shares of Lumentum in the fourth quarter worth $474,495,000. Value Aligned Research Advisors LLC bought a new stake in Lumentum during the 4th quarter valued at $432,062,000. Situational Awareness LP raised its holdings in Lumentum by 210.9% during the 4th quarter. Situational Awareness LP now owns 1,298,400 shares of the technology company's stock valued at $478,577,000 after buying an additional 880,800 shares during the last quarter. Finally, Assenagon Asset Management S.A. boosted its position in Lumentum by 707.0% during the 4th quarter. Assenagon Asset Management S.A. now owns 994,478 shares of the technology company's stock valued at $366,555,000 after buying an additional 871,249 shares during the period. 94.05% of the stock is owned by institutional investors.

About Lumentum

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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