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

Key Points

• Lumentum shares jumped at the open, rising from a prior close of $824.13 to $872.50 before trading near $839.69.
• Analyst sentiment remains positive overall, with 16 Buy, six Hold, and one Sell rating; the consensus is “Moderate Buy” with an average price target of $1,078.75.
• The company exceeded quarterly earnings and revenue expectations, reporting $3.23 in EPS and $1.01 billion in revenue, while insiders have sold nearly $86 million of stock over the past 90 days.

Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report) gapped up before the market opened on Monday. The stock had previously closed at $824.13, but opened at $872.50. Lumentum shares last traded at $839.6890, with a volume of 722,967 shares traded.

Analysts Set New Price Targets

Several equities analysts have recently issued reports on the stock. Sanford C. Bernstein started coverage on shares of Lumentum in a report on Wednesday, September 30th. They issued an "outperform" rating and a $1,220.00 price target for the company. Bank of America dropped their price objective on Lumentum from $1,100.00 to $1,000.00 and set a "neutral" rating on the stock in a research note on Wednesday, August 12th. Weiss Ratings downgraded Lumentum from a "hold (c-)" rating to a "sell (d-)" rating in a research note on Wednesday, August 19th. Citigroup lifted their target price on Lumentum from $1,200.00 to $1,400.00 and gave the stock a "buy" rating in a report on Monday, September 28th. Finally, UBS Group set a $820.00 target price on Lumentum in a research note on Wednesday, August 12th. Sixteen analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $1,078.75.

Lumentum Price Performance

The company's fifty day moving average price is $931.48 and its two-hundred day moving average price is $877.62. The company has a quick ratio of 1.40, a current ratio of 1.68 and a debt-to-equity ratio of 0.01. The company has a market cap of $77.26 billion, a price-to-earnings ratio of -10.35 and a beta of 1.53.

Lumentum (NASDAQ:LITE - Get Free Report) last issued its quarterly earnings data on Tuesday, August 11th. The technology company reported $3.23 EPS for the quarter, topping analysts' consensus estimates of $2.97 by $0.26. The business had revenue of $1.01 billion for the quarter, compared to analyst estimates of $987.70 million. Lumentum had a negative net margin of 230.15% and a positive return on equity of 26.34%. The firm's quarterly revenue was up 109.3% on a year-over-year basis. During the same period last year, the business posted $0.88 earnings per share. Lumentum has set its Q1 2027 guidance at 4.050-4.350 EPS. On average, equities research analysts forecast that Lumentum Holdings Inc. will post 19.79 EPS for the current fiscal year.

Insider Activity

In other news, CFO Wajid Ali sold 24,542 shares of the business's stock in a transaction dated Thursday, October 1st. The stock was sold at an average price of $1,048.50, for a total value of $25,732,287.00. Following the sale, the chief financial officer directly owned 75,074 shares in the company, valued at $78,715,089. The trade was a 24.64% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Jae Kim sold 12,000 shares of the company's stock in a transaction dated Tuesday, August 25th. The stock was sold at an average price of $852.58, for a total value of $10,230,960.00. Following the transaction, the senior vice president directly owned 37,804 shares of the company's stock, valued at $32,230,934.32. This represents a 24.09% 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. In the last 90 days, insiders have sold 94,496 shares of company stock worth $85,978,498. 0.28% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Lumentum

A number of hedge funds and other institutional investors have recently bought and sold shares of the company. Financiere des Professionnels Fonds d investissement inc. bought a new stake in shares of Lumentum during the 1st quarter valued at $2,046,000. Styrax Capital LP grew its holdings in shares of Lumentum by 3.6% during the 1st quarter. Styrax Capital LP now owns 140,000 shares of the technology company's stock worth $98,386,000 after purchasing an additional 4,837 shares in the last quarter. Whittier Trust Co. grew its holdings in shares of Lumentum by 21,806.5% during the 1st quarter. Whittier Trust Co. now owns 74,044 shares of the technology company's stock worth $57,183,000 after purchasing an additional 73,706 shares in the last quarter. Swiss National Bank increased its position in shares of Lumentum by 47.2% in the first quarter. Swiss National Bank now owns 208,015 shares of the technology company's stock worth $146,185,000 after purchasing an additional 66,700 shares during the period. Finally, Patton Fund Management Inc. bought a new position in shares of Lumentum in the first quarter worth $5,201,000. Institutional investors and hedge funds own 94.05% of the company's stock.

About Lumentum

Lumentum Holdings Inc is a technology company that designs and manufactures optical and photonic products for communications networks, industrial applications, and consumer electronics. Its portfolio includes optical components, modules, and subsystems used in fiber-optic networks, data centers, cloud computing infrastructure, telecommunications equipment, and high-speed connectivity systems.

The company also develops laser products for applications such as industrial processing, sensing, three-dimensional imaging, and other specialized commercial and consumer uses.

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