Lumentum Holdings (NASDAQ:LITE) shareholders are up 7.0% this past week, but still in the red over the last three years

Lumentum Holdings Inc. (NASDAQ:LITE) shareholders should be happy to see the share price up 17% in the last month. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 39% in the last three years, falling well short of the market return.

While the stock has risen 7.0% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for Lumentum Holdings

Given that Lumentum Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over the last three years, Lumentum Holdings' revenue dropped 4.4% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 12%, annualized. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Lumentum Holdings is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So it makes a lot of sense to check out what analysts think Lumentum Holdings will earn in the future (free analyst consensus estimates)

A Different Perspective

Investors in Lumentum Holdings had a tough year, with a total loss of 11%, against a market gain of about 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.3% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Lumentum Holdings better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Lumentum Holdings .

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com