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On Wednesday, Lumentum Holdings Inc . (NASDAQ:LITE), currently trading at $65.32 with a market capitalization of $4.47 billion, received a reaffirmation of confidence from Stifel analysts, who maintained a Buy rating and an $85.00 price target on the company’s shares. According to InvestingPro data, analyst targets range from $70 to $110, suggesting potential upside from current levels. The endorsement follows Lumentum’s announcement of robust fiscal third-quarter results, which saw both revenue and adjusted earnings per share (EPS) surpassing the upper limits of the company’s guidance. InvestingPro analysis reveals 13 analysts have revised their earnings upward for the upcoming period, reflecting growing confidence in the company’s trajectory. Subscribers can access 8 additional exclusive ProTips about LITE’s performance.
Lumentum’s performance was bolstered by sustained strong demand from cloud-related markets, as well as a gradual recovery in the networking and telecom sectors. The company’s management provided an optimistic outlook, particularly for cloud-based transceiver revenue, which is anticipated to surge by over 50% sequentially. The company maintains a strong financial position with a current ratio of 4.76, indicating ample liquidity to support its growth initiatives.
Furthermore, the company’s guidance for fiscal fourth-quarter revenue is slightly above the consensus estimates. Despite facing a 100 basis point gross margin headwind due to tariffs, Lumentum expects to achieve approximately 30% quarter-over-quarter EPS growth. This projection significantly exceeds current consensus expectations.
The company also highlighted its trajectory to surpass a $500 million quarterly revenue run-rate by the end of calendar year 2025. This goal is supported by increasing production capacity and sustained strong demand, which are projected to continue propelling growth into calendar year 2026. Stifel’s analysis underscores the positive near-term demand dynamics and the potential for continued growth for Lumentum.
In other recent news, Lumentum Holdings Inc. reported its third-quarter 2025 earnings, exceeding Wall Street expectations with an EPS of $0.57, compared to the forecast of $0.50. The company’s revenue also surpassed projections, reaching $425.2 million against the anticipated $418.15 million. This performance was driven by strong demand in the Cloud and Networking segment, which grew 8% sequentially and 16% year-over-year. Looking ahead, Lumentum projects fourth-quarter revenue between $440 million and $470 million, with expectations for further revenue and margin improvements. Needham analysts adjusted their outlook on the company, reducing the price target to $100 from $110 while maintaining a Buy rating, reflecting a broader compression of multiples within the technology sector. Despite facing challenges such as tariffs and supply constraints, Lumentum’s management remains optimistic, anticipating continued momentum in their Datacom segment, particularly with 800G modules. The company is also expanding its EML fabrication capacity in Thailand, aiming for a revenue target of $500 million by the end of the calendar year.
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