Lumentum Stock Surges on AI Optimism and Potential Nvidia Deal

Lumentum stock price target raised on potential Nvidia deal By Investing.com

On Thursday, B.Riley updated its outlook on shares of Lumentum Holdings Inc (NASDAQ:LITE), increasing the price target to $50 from $40 while maintaining a neutral rating. The adjustment follows Lumentum's fourth-quarter earnings report, which exceeded market expectations, posting revenue of $308.3 million and earnings per share (EPS) of $0.06, surpassing the consensus estimates of $301 million in revenue and $0.02 EPS. The company's Cloud & Networking (C&N) segment experienced an 11% year-over-year decline, with both Telecom and Datacom sectors showing a quarter-over-quarter decrease. Despite this, management anticipates growth in the second half of the year for Telecom, albeit modest, and a flat to slight increase in Datacom in the first quarter, influenced by Alphabet's (NASDAQ:GOOGL) ongoing product transition. A significant development for Lumentum was the announcement of a major transceiver award with a new client, speculated to be Nvidia (NASDAQ:NVDA). The potential collaboration with Nvidia could impact current suppliers if Lumentum becomes a significant provider for NVDA. However, the company's Thailand facility must undergo a qualification process, and any revenue from NVDA is not expected until early 2025. Lumentum has provided guidance for the first quarter's revenue and EPS to be in the range of $315 million to $335 million and $0.07 to $0.17, respectively. This forecast is slightly above the consensus estimate of $311 million in revenue and $0.12 EPS. B.Riley has raised its FY25 EPS estimate from $1.37 to $1.63 and introduced an FY26 EPS estimate of $3.63. The revised stock price target of $50 is based on an enterprise value-to-sales multiple of 2.8x, down from 3.0x, applied to the calendar year 2025 revenue estimate, adjusted for net debt. The firm suggests that it could become more positive on the stock if Nvidia's role as a major customer is confirmed, which may not be determined for another two quarters. In other recent news, the company has been successful in securing new customers, particularly a major AI transceiver customer and a new 800G Cloud Provider, which are expected to contribute to growth in the coming years. According to Needham and Jefferies, two reputable financial firms, Lumentum's stock is poised for a rebound, with both firms raising their price targets for the company. The optimism is driven by the company's forecast for the first fiscal quarter and the projected growth of AI Transceivers and EML/CW chips. These product lines are expected to more than double in quarterly revenue from approximately $111 million to $215 million in the upcoming year. Lumentum's goal to increase its quarterly revenue to $500 million by the end of 2025 is backed by the company's investment in new cloud and AI opportunities and a focus on enhancing production capacity. Lastly, Lumentum's CEO, Alan Lowe, discussed the company's path to achieving its revenue target, highlighting growth from various areas including EML chips, datacom optical switching, and transceivers. The company's acquisition of Cloud Light is expected to expedite high-speed transceiver production and contribute to substantial revenue growth. These are the recent developments that portray Lumentum's potential for growth in the near future. With Lumentum Holdings Inc (NASDAQ:LITE) navigating a challenging market environment, highlighted by a recent revenue decline and a dip in stock performance over the past month, investors have a complex landscape to assess. According to the latest data from InvestingPro, Lumentum holds a market capitalization of approximately $3.08 billion. The company's gross profit margin stands at a healthy 29.14% for the last twelve months as of Q3 2024, signaling a solid ability to generate profit from sales despite the revenue downturn. InvestingPro Tips suggest that management's confidence is reflected in aggressive share buybacks, and while analysts expect a sales decline in the current year, they predict profitability for the company within the year. This juxtaposition of near-term challenges with management's strategic decisions provides a nuanced view for potential investors. It's worth noting that Lumentum does not currently pay a dividend, which may influence investment decisions for those seeking income-generating stocks. For a more detailed analysis, including additional InvestingPro Tips for Lumentum, investors can explore the full suite of insights available on InvestingPro. There are currently 8 additional tips listed, offering a deeper dive into the company's financial health and market position.

Lumentum Analysts Boost Their Forecasts Following Earnings Beat - Lumentum Holdings (NASDAQ:LITE)

Lumentum Holdings Inc. LITE reported better-than-expected fourth-quarter financial results and issued strong first-quarter revenue guidance on Wednesday. The company reported quarterly earnings of 6 cents per share which beat the analyst consensus estimate of 3 cents per share. The company reported quarterly sales of $308.30 million which beat the analyst consensus estimate of $300.80 million. "We exceeded our guidance midpoints for both revenue and EPS in the fourth quarter. We booked record orders for datacom chips used in data center applications and saw emerging positive trends in the broader traditional networking market," said Alan Lowe, President and CEO. "We are making significant progress executing our strategy to broaden our cloud and AI customer base, which will lead to accelerated growth in calendar year 2025." Lumentum said it sees fiscal first quarter net revenue in the range of $315 million to $335 million and non-GAAP diluted earnings per share of 7 cents to 17 cents. Lumentum shares fell 1.5% to close at $45.53 on Wednesday. These analysts made changes to their price targets on Lumentum following earnings announcement. Needham analyst Alex Henderson maintained Lumentum with a Buy and raised the price target from $65 to $70. Rosenblatt analyst Mike Genovese maintained the stock with a Buy and raised the price target from $65 to $69. B. Riley Securities analyst Dave Kang maintained Lumentum with a Neutral and raised the price target from $40 to $50.. Barclays analyst Tom O'Malley maintained the stock with an Underweight and boosted the price target from $38 to $40. Read More: Pfizer, Conagra Brands And 2 Other Stocks Insiders Are Selling Considering buying LITE stock? Here's what analysts think: Market News and Data brought to you by Benzinga APIs

Lumentum shares poised for rebound as Needham raises target amid AI optimism By Investing.com

On Thursday, Needham maintained a positive outlook on Lumentum Holdings Inc . (NASDAQ:LITE) shares, raising its price target to $70.00 from $65.00 while keeping a Buy rating on the stock. The firm's stance comes after Lumentum reported a slight increase in revenue and earnings per share for the fourth fiscal quarter, surpassing modest expectations. The company's recent performance indicates it is currently at a cyclical low point. The company has provided a somewhat better forecast for the first fiscal quarter, though it remains subdued. Needham anticipates a significant rebound for Lumentum in the calendar year 2025, driven by the growth of AI Transceivers and EML/CW chips. These two product lines are expected to more than double in quarterly revenue, from approximately $111 million to $215 million in the upcoming year. Lumentum's stock has responded favorably to the announcement of a major new AI transceiver customer, which is expected to contribute to capacity in the calendar year 2025 and provide clear growth prospects. Furthermore, Lumentum is optimistic about securing an additional one to two significant customers in the coming quarters. The company's telecom sector is also projected to recover gradually. However, this recovery is not considered essential to drive the firm's financial model. The recent developments and forward-looking statements from Lumentum underscore the company's potential for growth in the near future, particularly in the field of AI communication technology. In other recent news, Lumentum Holdings Inc. has been making significant strides in the market. The company's recent fourth quarter earnings for the fiscal year 2024 exceeded the midpoint of their guidance, indicating strong financial performance. Key to this success has been a surge in orders for Datacom chips, despite challenges in the cloud and networking segment. Jefferies, a reputable financial firm, has raised Lumentum's price target from $53.00 to $65.00 in light of these developments. This revision follows the announcement of Lumentum securing a new 800G Cloud Provider customer, a significant development that underscores the company's growth potential. Lumentum's goal to increase its quarterly revenue to $500 million by the end of 2025 is also noteworthy. This ambition is supported by the company's investment in new cloud and AI opportunities and a focus on enhancing production capacity. As Lumentum Holdings Inc. (NASDAQ:LITE) navigates through its cyclical low, real-time data from InvestingPro offers a nuanced perspective on the company's financial health and market performance. With a current market capitalization of $3.08 billion, Lumentum's aggressive share buyback program, highlighted as one of the InvestingPro Tips, signals management's confidence in the company's value. Despite analysts anticipating a sales decline in the current year, another InvestingPro Tip suggests that they remain optimistic about the company's profitability within the year. InvestingPro Data reveals a challenging landscape with a negative P/E ratio of -8.75, indicating that the company has not been profitable over the last twelve months ending in Q3 2024. The revenue also reflects a downward trend with a -21.81% decline during the same period. However, the company's liquid assets still exceed its short-term obligations, providing some financial stability amidst the reported sales challenges. For investors seeking a deeper analysis, InvestingPro offers additional tips on Lumentum, which can be accessed on their platform. The insights provided by InvestingPro could be particularly valuable for those considering the stock's future trajectory in the context of the anticipated growth in AI Transceivers and EML/CW chips as outlined by Needham's positive outlook.

Why Lumentum Shares Are Trading Higher By Around 16%; Here Are 20 Stocks Moving Premarket - Lumentum Holdings (NASDAQ:LITE)

Shares of Lumentum Holdings Inc. LITE rose sharply during Thursday's session after the company reported better-than-expected fourth-quarter financial results and issued strong first-quarter revenue guidance. The company reported quarterly earnings of 6 cents per share which beat the analyst consensus estimate of 3 cents per share. Lumentum Holdings shares jumped 16.4% to $52.99 in pre-market trading. Here are some other stocks moving in pre-market trading. Gainers SciSparc Ltd. SPRC rose 90.1% to $0.6123 in today's pre-market trading after the company announced the courts approval to convene a meeting of shareholders to approve a merger with AutoMax. VS MEDIA Holdings Limited VSME gained 86.2% to $1.33 in pre-market trading after gaining 4% on Wednesday. Altamira Therapeutics Ltd. CYTO gained 52.2% to $1.40 in pre-market trading. Airship AI Holdings, Inc. AISP jumped 20.2% to $3.03 in pre-market trading after reporting a profit for the second quarter. Accuray Incorporated ARAY gained 20.2% to $1.72 in pre-market trading after the company reported better-than-expected fourth-quarter sales results. Nxu, Inc. NXU gained 15.2% to $0.39 in pre-market trading. Ulta Beauty, Inc. ULTA gained 15.2% to $379.24 in pre-market trading after Berkshire Hathaway added a stake in the company. Onconetix, Inc. ONCO shares rose 13.7% to $0.1707 in pre-market trading after gaining 13% on Wednesday. Syntec Optics Holdings, Inc. OPTX gained 13.6% to $1.67 in pre-market trading. Syntec Optics Holdings posted second-quarter results on Wednesday. Losers Turnstone Biologics Corp. TSBX shares declined 40.5% to $1.30 in pre-market trading after the company reported worse-than-expected second-quarter EPS results. Titan Machinery Inc. TITN declined 26.9% to $11.24 in pre-market trading as the company reported weak preliminary financial results for the second quarter. Jianzhi Education Technology Group Company Limited JZ shares declined 26.9% to $0.65 in pre-market trading after gaining 12% on Wednesday Vicinity Motor Corp VEV fell 20.5% to $0.1450 in today's pre-market trading after dipping 12% on Wednesday. Spire Global, Inc. SPIR shares dipped 18.5% to $8.28 in pre-market trading after the company announced it filed a Form 12b-25 for late filing of its Q2 2024 report. Avalon GloboCare Corp. ALBT fell 18% to $0.3922 in pre-market trading. Avalon GloboCare shares jumped 82% on Wednesday after the company announced its Laboratory Services MSO, LLC has begun manufacturing the GeeWhiz external male catheter. Faraday Future Intelligent Electric Inc. FFIE shares fell 16.4% to $0.1403 in pre-market trading after the company announced a reverse stock split and authorized share reduction. Aethlon Medical, Inc. AEMD shares fell 16.1% to $0.3227 in pre-market trading following worse-than-expected first-quarter EPS results. Digital Ally, Inc DGLY fell 14.6% to $1.160 Inc pre-market trading. Digital Ally shares jumped 62% on Wednesday after the company was granted a U.S. Patent for tracking and analysis of drivers within a fleet of vehicles. Precigen, Inc. PGEN shares fell 9% to $1.02 in pre-market trading after posting weak quarterly results Now Read This: Jim Cramer: 'Avoid Middle Market Plays' Like Golub Capital, Buy Mueller Industries -- 'It Is Fantastic' Market News and Data brought to you by Benzinga APIs