Fact based stock research
Lumentum (NasdaqGS:LITE)
US55024U1097
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Lumentum stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), Lumentum (Communications Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Lumentum are low in value (priced high) with a consolidated Value Rank of 23 (worse than 77% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on Lumentum's financial characteristics. As the company Lumentum's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 23), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 34), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Communications Equipment |
| Index | NASDAQ, S&P MIDCAP |
| Size class | Large |
18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Lumentum
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 26 |
|
31 |
|
24 |
|
23 |
|
| GROWTH | ||||||||
| GROWTH | 66 |
|
29 |
|
47 |
|
39 |
|
| SAFETY | ||||||||
| SAFETY | 71 |
|
78 |
|
40 |
|
34 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
68 |
|
45 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
60 |
|
20 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), Lumentum (Communications Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Lumentum are low in value (priced high) with a consolidated Value Rank of 23 (worse than 77% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on Lumentum's financial characteristics. As the company Lumentum's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 23), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 34), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 26 |
|
31 |
|
24 |
|
23 |
|
| GROWTH | ||||||||
| GROWTH | 66 |
|
29 |
|
47 |
|
39 |
|
| SAFETY | ||||||||
| SAFETY | 71 |
|
78 |
|
40 |
|
34 |
|
| COMBINED | ||||||||
| COMBINED | 47 |
|
41 |
|
9 |
|
17 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 23 (worse than 77% compared with alternatives), Lumentum shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Lumentum. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 56, which means that the stock price is lower compared with invested capital than for 56% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 31 which means the stock price compared with what market professionals expect for future profits is higher than 69% of comparable companies, indicating a low value concerning Lumentum's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 56 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 23, is a sell recommendation based on Lumentum's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Lumentum, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 21 |
|
19 |
|
30 |
|
31 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 88 |
|
67 |
|
40 |
|
41 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 25 |
|
43 |
|
56 |
|
56 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 26 |
|
31 |
|
24 |
|
23 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Lumentum shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Lumentum. While Sales Growth ranks at 87, professionals currently expect the company to grow more than 87% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 13, which means that, currently, professionals expect the company to grow its profits less than 87% of its competitors, and Capital Growth has a low rank of 23. Historic stock returns were also below average with a current Stock Returns rank of 46 which means that the stock returns have recently been below 54% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 34 |
|
74 |
|
96 |
|
87 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 50 |
|
18 |
|
20 |
|
13 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
13 |
|
18 |
|
23 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 67 |
|
47 |
|
51 |
|
46 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 66 |
|
29 |
|
47 |
|
39 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Lumentum has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Lumentum is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lumentum and the other two below average. Refinancing is at 75, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. But Leverage is high with a rank of 20, meaning the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. Liquidity is also on the riskier side with a rank of 22, meaning the company generates less profit to service its debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Lumentum has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Lumentum are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Lumentum and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 71 |
|
41 |
|
21 |
|
20 |
|
| REFINANCING | ||||||||
| REFINANCING | 35 |
|
69 |
|
76 |
|
75 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
|
63 |
|
23 |
|
22 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 71 |
|
78 |
|
40 |
|
34 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
75 |
|
41 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
42 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
22 |
|
1 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
80 |
|
81 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
68 |
|
45 |
|
new |
|
Stock analysis by the purely fact based Obermatt Method for Lumentum from April 18, 2024.
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