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Lumentum Holdings Inc. (LITE)
NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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At close: 04:00PM EST
4,580 reactions on $LITE conversation
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The Feb 3 earnings report is now in focus. The share buyback will have reduced the number of outstanding shares, so by definition the EPS will be higher than it would have been without the buyback.
There will be lots of interesting topics to listen for on the call:
-The impact of IIVI on LITE's business
-Supply chain issues
-The merger with NPTN
-The status of the share buyback
BILLY is right about one thing though. Since March of 2020 LITE has been very, very tough to trade based on the charts. There have been dozens of false buy signals as well as sell signals. In past years, buy and sell signals have been much less frequent and they have tended to follow through pretty consistently. This has not been the case since March of 2020.
The news also doesn't affect LITE's stock price in a logical manner. A few weeks ago, AAPL lowered their IPhone sales for the upcoming quarter. That would have caused LITE to take a 10-15% haircut in the past. That's even if it was some overseas analyst lowering his IPhone sales forecast.
Maybe it's the stock buy back in action. Maybe it's just the same manipulation LITE has been affected by in past years. Manipulation with LITE works in both directions which makes it even harder to deal with. Maybe it's just some new stock picking guru talking about LITE on a YouTube video.
It's a different market than it used to be even a few years ago. It's a lot more like rolling the dice than anything else.
It's good to see our friend BILLY back again. He's the best contrarian indicator there is next to Cramer.
I wonder how much the share buyback has contributed to this recent mover higher.
China & LITE are now buddy boys. I am out of here.
this is a nice run up, any news or is this market pull?
Great earnings from some in the sector could be sparking the gain. Actually been a disappointing year with the coherent debacle, so maybe this is just our time to shine.
CFRA ADDS LUMENTUM HOLDINGS TO SMALL/MID-CAP GROWTH MODEL PORTFOLIO.
"We anticipate 3D sensing shipments will improve over time as customers incorporate lasers into both the front-facing and world-facing cameras on mobile devices. In addition, we expect the company to benefit from new device ramps from key customer Apple, among others, which may roll out AR/VR goggles in 2022 and potentially AR glasses in the 2023-2025 timeframe."
Took a bit of profit today and I'm out.
Analyst George Notter from Jefferies maintained a Buy rating on Lumentum Holdings (LITE), with a $115 price target.
A $1/share dividend would be nice...
Yahoo Finance Insights
Lumentum is up 4.91% to 98.00
Here are a few ideas not related to point & figure charts that I think we can all agree on:
1) Analysts have very little credibility
2) Much of the movement of an individual stock price is driven by the movement of the overall market and the sector
3) It helps to think more market neutral than fall in love with a bullish or bearish narrative
4) Thinking about ideas like I listed in my previous post helps frame the problem of how you should be positioned in an individual stock. I don't know the answers but I do know the questions I'd be asking management during the conference call.
It would be great to get some good discussion going prior to the conference call next week.
Just read their August earnings transcript here:
My takeaways are the company is the leader in their various markets, especially 3D sensing where they are by far the largest vendor with the highest quality and the ONLY company able to scale with no quality issues. They are growing strongly in 5G and data center and currently have a $150M backlog which will take at least 3 quarters to meet because new orders keep coming in. Margins are improving and with the new Iphone coming soon with world-facing 3D sensing camera, both sales/margins should remain strong going forward. Company has net cash position with no debt due in the next few years, which gives them flexibility.
Unlike competitors, they are having to add capacity to keep up with strong demand. They have been investing heavily in R&D, which will allow them to release great new tech and expect to maintain the lead in their data/vcsel chips for foreseeable future. Even with the COVID-related headwinds and Huawei ban, their sales/eps/margins are still growing nicely.
A friend says that a 700 Million buy back of shares would/will reduce the number of shares by 13% . (Assuming they buy at or near current levels). That would also increase earnings per share by 13%. So, as you said in a Bullish scenario we would assume LITE would return to previous 52 week high on 112 so if we add 13% on top of 112 we get a price of 127 within the next 12 to 18 months. Note if sales increase significantly, the price could and will go much higher.
The latest broker upgrades I have are as follows.... (conformation welcome).
B. Riley restated a “buy” rating and issued a $71.00 price target (up previously from $68.00) on shares of Lumentum in a research note on Friday. Craig Hallum restated a “buy” rating and issued a $75.00 price target (up previously from $60.00) on shares of Lumentum in a research report on Friday. Jun Zhang, Rosenblatt Securities, reiterated a ‘buy’ with a sp target of $80 yesterday on shares of Lumentum.
LITE is a buy option for the following reasons:
1. Technically, it has oversold. The stock has beat market expectations and as they come and upgrade it, it will quickly come back to its upside trend.
2. The future is bright for the stock specially after the last purchase.
The bottom has already reach though. Today, I purchased some and will buy again in near future.
I posted the following 6 weeks ago. It has nothing to do with P&F charts.
Here are a few questions for anyone on the message board.
-Why did LITE, IIVI and MKSI move in lockstep and all have a stellar day on Friday?
-When an analyst like Simon Leopold "pounds the table" does that give the all clear sign?
-How will LITE trade into the upcoming earnings report with those less than stellar guidance figures?
-What do you think guidance will be for the following quarter?
-Now that COHR is in a key competitor's hands instead of LITE's what does that do to the short, mid and long term prospects for LITE?
Are you better off buying IIVI stock instead of LITE since they got COHR?
-Has IIVI been cutting into LITE's share due to the Sherman Texas plant being up and running and certified for the past 12 months? By how much?
-Is the overall market exuberance we've been seeing going to continue? What happens to LITE when the overall market corrects? Has the correction already started?
-What's the status of supply chain issues?
-What's going on with Huawei?
Now I'm back to current commentary. The 3rd to last bullet point is by far the most important one on what happens to LITE's stock price in the short and medium term. So, that's what I'll be focused on.
Moving up steady, a little above the market average. The downside risk looks low as most of the negative news has been factored in. I'm still underwater but I'd rather own it at this price for the long term. 3D and 5G is a good bet.
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