Lumentum (NASDAQ:LITE) Stock Falls 11.5% - Time to Sell?

Key Points

• Lumentum shares fell 11.5% to $752.54 on elevated trading volume, trading well below their 50-day and 200-day moving averages.
• Despite the sell-off, analyst sentiment remains positive: the stock has a “Moderate Buy” consensus rating and an average price target of $1,080.83. Lumentum recently beat quarterly earnings and revenue expectations, with revenue up 109.3% year over year.
• Insiders have sold $86.0 million of stock over the past 90 days, while institutional investors own 94.05% of the company. The insider sales were conducted under pre-arranged Rule 10b5-1 plans.

Lumentum Holdings Inc. (NASDAQ:LITE - Get Free Report)'s share price traded down 11.5% on Thursday. The company traded as low as $746.23 and last traded at $752.54. 6,092,261 shares were traded during mid-day trading, an increase of 11% from the average session volume of 5,478,972 shares. The stock had previously closed at $850.70.

Wall Street Analysts Forecast Growth

Several brokerages have issued reports on LITE. UBS Group set a $820.00 target price on Lumentum in a research report on Wednesday, August 12th. Raymond James Financial reiterated an "outperform" rating and issued a $1,036.00 price target on shares of Lumentum in a report on Wednesday, August 12th. Needham & Company LLC reiterated a "buy" rating and issued a $1,040.00 price target on shares of Lumentum in a report on Wednesday, August 12th. Evercore assumed coverage on Lumentum in a research note on Monday, August 31st. They set an "outperform" rating and a $1,100.00 price target for the company. Finally, Zacks Research downgraded shares of Lumentum from a "strong-buy" rating to a "hold" rating in a research note on Monday, October 12th. Sixteen equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $1,080.83.

Lumentum Trading Down 11.5%

The stock's 50 day moving average is $930.30 and its two-hundred day moving average is $879.13. The company has a market capitalization of $68.17 billion, a PE ratio of -9.15 and a beta of 1.53. The company has a quick ratio of 1.40, a current ratio of 1.68 and a debt-to-equity ratio of 0.01.

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

Insiders Place Their Bets

In related news, insider Yuen Wupen sold 307 shares of the firm's stock in a transaction dated Tuesday, September 29th. The stock was sold at an average price of $945.00, for a total transaction of $290,115.00. Following the sale, the insider owned 108,320 shares of the company's stock, valued at $102,362,400. This trade represents a 0.28% decrease in their ownership of the stock. The sale 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, CFO Wajid Ali sold 24,542 shares of Lumentum stock in a transaction dated Thursday, October 1st. The shares were sold at an average price of $1,048.50, for a total value of $25,732,287.00. Following the completion of the transaction, the chief financial officer owned 75,074 shares in the company, valued at $78,715,089. This trade represents a 24.64% decrease in their position. 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 over the last 90 days. 0.28% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of the company. Jupiter Topco LLC acquired a new stake in Lumentum in the second quarter valued at approximately $1,621,396,000. Amundi grew its holdings in Lumentum by 188.7% in the second quarter. Amundi now owns 658,427 shares of the technology company's stock worth $564,970,000 after purchasing an additional 430,355 shares during the last quarter. WT Asset Management Ltd acquired a new position in shares of Lumentum during the second quarter worth $494,688,000. Janus Henderson Group PLC increased its position in shares of Lumentum by 163.2% during the first quarter. Janus Henderson Group PLC now owns 567,182 shares of the technology company's stock worth $398,590,000 after purchasing an additional 351,676 shares in the last quarter. Finally, Legal & General Group Plc purchased a new stake in shares of Lumentum during the 2nd quarter valued at $376,539,000. Hedge funds and other institutional investors own 94.05% of the company's stock.

Lumentum Company Profile

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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