#7 - Lumentum Holdings (NASDAQ:LITE)
Another picks and shovel stock that rounds out our list of virtual reality stocks is Lumentum Holdings (NASDAQ: LITE). The company manufactures optical and photonic products. As it relates to virtual reality, Lumentum sells optical chips and 3D sensing chips and one of its key customers is Apple, which then uses the chips to introduce interactive VR features in its iconic iPhones.
As demand for virtual reality features increases so will the company’s customer base. In fact, this demand is the primary revenue driver for the business. This could be one reason for the volatility in LITE stock.
The stock is a favorite of the analyst community. Five analysts have boosted their price target for the stock since the company reported earnings on August 17. Part of the reason is the company’s guidance. Earnings are now expected to be in a range of $1.47 per share to $1.61 per share topping analysts' expectations for $1.45.
About Lumentum
Lumentum Holdings Inc manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates through two segments: Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables.
More about Lumentum- Current Price
- $75.77
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 12 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $82.20 (8.5% Upside)
One final thing to consider about virtual reality stocks is that this is still a niche industry. That’s reflected in the price of VR and AR devices which is still prohibitive for many consumers. And even as applications for this technology are growing, there are many more that have not been developed yet.
Do you know what that means? If the sector grows at anywhere near the CAGR that’s expected, VR and AR devices will become an entertainment staple in many homes.
Some of the stocks in this presentation are among the hottest in the tech sector. Others are pure plays and may feel more speculative. One way that you can even out your risk is to invest in an exchange-traded fund (ETF) that tracks companies in the sector.
Investors looking for such funds may consider the BlueStar Augmented and Virtual Reality Index which is made up of a modified equal-weight portfolio of companies whose products or services are largely tied to the development or commercialization of VR or AR technologies.
More Investing Slideshows:
