Lumentum: Speed Is Everything (Archive, Full Access)
Lumentum’s 1.6T lead and optical-switch backlog support earnings upside despite rich valuation.
This 5-Minute Pitch was originally published on Seeking Alpha. It is shared here to showcase my work and track record. I also publish full 5-Minute Pitches on this site. This will be behind a paywall, accessible to Hunter Tier members.
Elevator Pitch
- Lumentum’s early 1.6T module execution is driving market-share gains, with this business already exceeding a $200 million quarterly revenue run rate.
- Growing optical circuit switch orders, purchase commitments, and 1.6T demand could support earnings above current FY28 consensus estimates.
- A higher 200G EML mix and factory utilization are margin levers that can lift gross margins to above 50%.
- Lumentum trades at a rather rich valuation, but management continues to guide revenue and margin above consensus expectations. And the 1-yr fwd PEs may be undershooting on earnings estimates.
- The stock’s long-term uptrend remains intact, and it makes sense to get in during the bull flag consolidation.
Read the full article here.
