DB:LU2

Stock Analysis Report

Lumentum Holdings

Executive Summary

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa.

Snowflake

Fundamentals

High growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Lumentum Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LU2's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.4%

LU2

2.5%

DE Communications

0.1%

DE Market


1 Year Return

76.9%

LU2

-0.7%

DE Communications

8.8%

DE Market

Return vs Industry: LU2 exceeded the German Communications industry which returned -0.7% over the past year.

Return vs Market: LU2 exceeded the German Market which returned 8.8% over the past year.


Shareholder returns

LU2IndustryMarket
7 Day3.4%2.5%0.1%
30 Day26.3%6.3%5.9%
90 Day18.8%17.4%15.0%
1 Year76.9%76.9%-0.1%-0.7%12.2%8.8%
3 Year66.8%66.8%2.7%1.9%25.5%14.5%
5 Yearn/a60.8%58.0%40.1%21.0%

Price Volatility Vs. Market

How volatile is Lumentum Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Lumentum Holdings undervalued compared to its fair value and its price relative to the market?

18.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LU2 (€60.79) is trading below our estimate of fair value (€74.11)

Significantly Below Fair Value: LU2 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: LU2 is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: LU2 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LU2's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LU2 is overvalued based on its PB Ratio (3.3x) compared to the DE Communications industry average (2.4x).


Next Steps

Future Growth

How is Lumentum Holdings forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

44.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LU2 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.2%).

Earnings vs Market: LU2 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: LU2's is expected to become profitable in the next 3 years.

Revenue vs Market: LU2's revenue (10.7% per year) is forecast to grow faster than the German market (4.9% per year).

High Growth Revenue: LU2's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LU2's Return on Equity is forecast to be high in 3 years time (20.2%)


Next Steps

Past Performance

How has Lumentum Holdings performed over the past 5 years?

31.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LU2 has a high level of non-cash earnings.

Growing Profit Margin: LU2's current net profit margins (-2.2%) are lower than last year (20.7%).


Past Earnings Growth Analysis

Earnings Trend: LU2 is unprofitable, but has reduced losses over the past 5 years at a rate of 31.7% per year.

Accelerating Growth: Unable to compare LU2's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LU2 is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (21.6%).


Return on Equity

High ROE: LU2 has a negative Return on Equity (-2.32%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lumentum Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: LU2's short term assets ($1.4B) exceeds its short term liabilities ($316.8M)

Long Term Liabilities: LU2's short term assets (1.4B) exceeds its long term liabilities (989.7M)


Debt to Equity History and Analysis

Debt Level: LU2's debt to equity ratio (54.2%) is considered high

Reducing Debt: Insufficient data to determine if LU2's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: LU2's debt is well covered by operating cash flow (42.6%).

Interest Coverage: LU2 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: LU2 has a high level of physical assets or inventory.

Debt Coverage by Assets: LU2's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Lumentum Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage3.2%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate LU2's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate LU2's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LU2's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LU2's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LU2's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

  • Explore strong dividend paying companies in the Tech industry.

Management

What is the CEO of Lumentum Holdings's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Alan Lowe (57yo)

4.3yrs

Tenure

US$9,325,740

Compensation

Mr. Alan S. Lowe has been the Chief Executive Officer and President of Lumentum Holdings Inc. since July 2015. Mr. Lowe has over 20 years experience in general management, operations, sales and business de ...


CEO Compensation Analysis

Compensation vs Market: Alan's total compensation ($USD9.33M) is above average for companies of similar size in the German market ($USD3.68M).

Compensation vs Earnings: Alan's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

2.8yrs

Average Tenure

50.5yo

Average Age

Experienced Management: LU2's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

4.3yrs

Average Tenure

57yo

Average Age

Experienced Board: LU2's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: LU2 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$2,54317 Sep 19
Matthew Sepe
EntityIndividual
Role
Chief Accounting Officer
VP of Finance
Shares48
Max PriceUS$52.98
SellUS$455,80330 Aug 19
Vincent Retort
EntityIndividual
Role
Chief Operating Officer
Executive VP
Shares8,904
Max PriceUS$51.19
SellUS$194,01330 Aug 19
Jason Reinhardt
EntityIndividual
Role
Head of Sales
Executive Vice President of Global Sales
Shares3,790
Max PriceUS$51.19
SellUS$1,063,48930 Aug 19
Alan Lowe
EntityIndividual
Role
Chief Executive Officer
President
Shares20,775
Max PriceUS$51.19
SellUS$136,78230 Aug 19
Judy Hamel
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares2,672
Max PriceUS$51.19
SellUS$1,342,92923 Aug 19
Jason Reinhardt
EntityIndividual
Role
Head of Sales
Executive Vice President of Global Sales
Shares25,000
Max PriceUS$53.72
SellUS$12,39120 Aug 19
Matthew Sepe
EntityIndividual
Role
Chief Accounting Officer
VP of Finance
Shares228
Max PriceUS$54.35
SellUS$264,91020 Aug 19
Vincent Retort
EntityIndividual
Role
Chief Operating Officer
Executive VP
Shares4,908
Max PriceUS$54.35
SellUS$66,27320 Aug 19
Jason Reinhardt
EntityIndividual
Role
Head of Sales
Executive Vice President of Global Sales
Shares1,228
Max PriceUS$54.35
SellUS$581,75420 Aug 19
Alan Lowe
EntityIndividual
Role
Chief Executive Officer
President
Shares10,779
Max PriceUS$54.35
SellUS$34,39120 Aug 19
Judy Hamel
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares637
Max PriceUS$54.35
SellUS$257,40215 Aug 19
Matthew Sepe
EntityIndividual
Role
Chief Accounting Officer
VP of Finance
Shares4,811
Max PriceUS$53.50
SellUS$74,53713 May 19
Judy Hamel
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares1,429
Max PriceUS$52.16
SellUS$129,96628 Feb 19
Martin Kaplan
EntityIndividual
Shares3,025
Max PriceUS$42.96
SellUS$425,41822 Feb 19
Jason Reinhardt
EntityIndividual
Role
Head of Sales
Executive Vice President of Global Sales
Shares9,575
Max PriceUS$44.43
SellUS$123,11315 Feb 19
Harold Covert
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,017
Max PriceUS$40.81

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.4%.


Management Team

  • Alan Lowe (57yo)

    President

    • Tenure: 4.3yrs
    • Compensation: US$9.33m
  • Vince Retort (65yo)

    Executive VP

    • Tenure: 3.8yrs
    • Compensation: US$4.25m
  • Wajid Ali (46yo)

    Executive VP & CFO

    • Tenure: 0.8yrs
    • Compensation: US$7.63m
  • Judy Hamel (53yo)

    Senior VP

    • Tenure: 4.3yrs
    • Compensation: US$2.16m
  • Jason Reinhardt (45yo)

    Executive Vice President of Global Sales

    • Tenure: 3.8yrs
    • Compensation: US$2.69m
  • Chris Coldren (48yo)

    Senior Vice President of Strategy & Corporate Development

    • Tenure: 0.8yrs
    • Compensation: US$1.86m
  • Sharon Parker

    Senior Vice President of Human Resources

    • Tenure: 0yrs
  • Doug Alteen

    Senior VP & GM of Telecom Transport

    • Tenure: 1.8yrs
  • Shreyas Shah

    Chief Information Officer & Senior VP of IT

    • Tenure: 0yrs
  • Matt Sepe

    VP of Finance

    • Tenure: 1.4yrs

Board Members

  • Hal Covert (72yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$280.05k
  • Alan Lowe (57yo)

    President

    • Tenure: 4.3yrs
    • Compensation: US$9.33m
  • Samuel Thomas (67yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$253.80k
  • Ian Small (54yo)

    Independent Director

    • Tenure: 0.9yrs
    • Compensation: US$229.28k
  • Penny Herscher (58yo)

    Chair of Board of Directors

    • Tenure: 0.3yrs
    • Compensation: US$273.80k
  • Brian Lillie (55yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$253.80k
  • Julie Johnson (53yo)

    Independent Director

    • Tenure: 2yrs
    • Compensation: US$238.75k

Company Information

Lumentum Holdings Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lumentum Holdings Inc.
  • Ticker: LU2
  • Exchange: DB
  • Founded: 2015
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$5.226b
  • Listing Market Cap: US$4.750b
  • Shares outstanding: 77.20m
  • Website: https://www.lumentum.com

Number of Employees


Location

  • Lumentum Holdings Inc.
  • 400 North McCarthy Boulevard
  • Milpitas
  • California
  • 95035
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LITENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 2015
LU2DB (Deutsche Boerse AG)YesCommon StockDEEURJul 2015
0JVVLSE (London Stock Exchange)YesCommon StockGBUSDJul 2015
LITE *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJul 2015

Biography

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 in two segments, Optical Communicati ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/13 21:23
End of Day Share Price2019/11/13 00:00
Earnings2019/09/28
Annual Earnings2019/06/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.