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

Key Points

• Lumentum shares opened sharply lower, falling from the prior close of $648.06 to $592.52 before recovering to about $613 during trading.
• The company reported quarterly EPS of $4.57, beating estimates of $4.22, while revenue of $1.26 billion matched forecasts and rose 136.5% year over year.
• Analyst views remain mostly positive, with a “Moderate Buy” consensus and an average price target of $1,053.17, though UBS cut its target to $686 and Zacks downgraded the stock to Hold.

Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report)'s share price gapped down before the market opened on Thursday. The stock had previously closed at $648.06, but opened at $592.52. Lumentum shares last traded at $613.1080, with a volume of 1,247,394 shares.

Analyst Upgrades and Downgrades

Several equities research analysts have issued reports on LITE shares. Citigroup raised their price target on shares of Lumentum from $1,200.00 to $1,400.00 and gave the stock a "buy" rating in a research note on Monday, September 28th. Mizuho set a $1,132.00 price objective on shares of Lumentum in a research report on Monday, November 2nd. Zacks Research downgraded shares of Lumentum from a "strong-buy" rating to a "hold" rating in a research note on Monday, October 12th. UBS Group reduced their price objective on shares of Lumentum from $960.00 to $686.00 and set a "neutral" rating on the stock in a research note on Tuesday. Finally, JPMorgan Chase & Co. raised their target price on shares of Lumentum from $1,165.00 to $1,280.00 and gave the stock an "overweight" rating in a research report on Wednesday, August 12th. Two research analysts have rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $1,053.17.

Lumentum Price Performance

The business's 50 day moving average price is $877.15 and its 200-day moving average price is $805.47. The company has a quick ratio of 1.27, a current ratio of 1.61 and a debt-to-equity ratio of 0.01. The company has a market cap of $57.36 billion, a PE ratio of -8.01 and a beta of 1.64.

Lumentum (NASDAQ:LITE - Get Free Report) last announced its earnings results on Monday, November 2nd. The technology company reported $4.57 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $4.22 by $0.35. The company had revenue of $1.26 billion for the quarter, compared to analyst estimates of $1.26 billion. Lumentum had a positive return on equity of 28.85% and a negative net margin of 175.82%. Lumentum's quarterly revenue was up 136.5% on a year-over-year basis. During the same period in the prior year, the company posted $1.10 EPS. As a group, analysts forecast that Lumentum Holdings Inc. will post 19.93 earnings per share for the current year.

Insiders Place Their Bets

In other news, insider Yuen Wupen sold 307 shares of Lumentum stock in a transaction on Tuesday, September 29th. The stock was sold at an average price of $945.00, for a total transaction of $290,115.00. Following the transaction, the insider owned 108,320 shares in the company, valued at approximately $102,362,400. The trade was a 0.28% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Wajid Ali sold 24,542 shares of the stock in a transaction that occurred on Thursday, October 1st. The stock was sold at an average price of $1,048.50, for a total transaction of $25,732,287.00. Following the completion of the sale, the chief financial officer directly owned 75,074 shares of the company's stock, valued at $78,715,089. This trade represents a 24.64% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 94,496 shares of company stock valued at $85,978,498 in the last quarter. Insiders own 0.28% of the company's stock.

Hedge Funds Weigh In On Lumentum

A number of hedge funds have recently added to or reduced their stakes in LITE. Red Spruce Capital LLC grew its stake in Lumentum by 0.4% in the 3rd quarter. Red Spruce Capital LLC now owns 3,200 shares of the technology company's stock valued at $3,108,000 after buying an additional 12 shares during the last quarter. CYBER HORNET ETFs LLC lifted its position in Lumentum by 7.2% during the 2nd quarter. CYBER HORNET ETFs LLC now owns 209 shares of the technology company's stock worth $179,000 after acquiring an additional 14 shares during the last quarter. Hilltop National Bank boosted its holdings in Lumentum by 26.8% during the second quarter. Hilltop National Bank now owns 71 shares of the technology company's stock valued at $61,000 after acquiring an additional 15 shares during the period. TrinityBridge Ltd boosted its holdings in Lumentum by 35.8% during the third quarter. TrinityBridge Ltd now owns 72 shares of the technology company's stock valued at $70,000 after acquiring an additional 19 shares during the period. Finally, Sumitomo Mitsui Financial Group Inc. grew its position in shares of Lumentum by 6.7% in the third quarter. Sumitomo Mitsui Financial Group Inc. now owns 320 shares of the technology company's stock valued at $311,000 after purchasing an additional 20 shares during the last quarter. Institutional investors and hedge funds own 94.05% of the company's stock.

About Lumentum

Lumentum Holdings Inc. develops and manufactures optical and photonic products used in communications networks and industrial applications. Its offerings include optical components, modules and lasers that help transmit and process data across telecommunications and data center networks. The company also supplies lasers and related technologies for industrial uses, including precision manufacturing and semiconductor production. Its products serve customers in markets around the world. Lumentum became an independent public company in 2015 through a spin-off from JDSU, now Viavi Solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.