Update shared on09 Sep 2025
Fair value Increased 1.14%Upward revisions to Lumentum’s price target reflect strong Q4 results, robust datacom and AI-driven demand, and greater business resilience beyond Cloud, though some caution that recent gains may already be reflected in valuations; consensus fair value has nudged up from $138.26 to $139.84.
Analyst Commentary
- Bullish analysts cite Lumentum’s very strong Q4 results and above-consensus Q1 guidance, powered by robust demand for datacom components and record EML shipments, fueled further by AI infrastructure investments.
- Significant sequential growth in Cloud modules was noted, but Lumentum’s ability to accelerate revenue achievement without over-reliance on Cloud modules is considered a major positive for business resilience.
- Industry-wide, growth in data speed and optical transmission needs, particularly due to AI and cloud, are boosting the sector, benefiting Lumentum and peers; however, some view current valuations as extended relative to historic multiples.
- Capacity constraints in certain segments signal potential upside to management's forward outlook, indicating that additional earnings surprises are possible if these bottlenecks are addressed.
- Bullish analysts note momentum from positive sector commentary (e.g., from Ciena) and accelerated business activity post-earnings, while more cautious analysts argue much of the good news is already priced in after a significant stock run-up.
What's in the News
- Completed buyback of 7,685,774 shares (10.55%) for $630.38 million; no additional repurchases in latest tranche.
- Provided Q1 FY26 earnings guidance: net revenue expected between $510 million and $540 million.
- Reported $0.1 million intangible asset write-off for the June 2025 quarter.
- Announced major capacity expansion of U.S.-based semiconductor facility to strengthen domestic manufacturing and the global AI supply chain, creating high-skilled jobs.
- Launched PicoBlade Core ultrafast laser platform and expanded industrial laser and specialty fiber offerings; highlighted new products and applications at Laser World of Photonics 2025.
- Added as a constituent to multiple Russell Growth Benchmark Indices, including Russell 1000, 2500, 3000, Midcap, 3000E, and Small Cap Composite.
Valuation Changes
Summary of Valuation Changes for Lumentum Holdings
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $138.26 to $139.84.
- The Discount Rate for Lumentum Holdings has risen slightly from 8.55% to 8.77%.
- The Future P/E for Lumentum Holdings remained effectively unchanged, moving only marginally from 33.18x to 33.76x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.