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Priced above base case
What is Lumentum Holdings Inc. (LITE) worth?
Currently $837.56 — above the base case ($500.00) · ● live
High-growth
low confidence in the point estimate
— for this profile, read the range & what the price implies, not the single number
● live · as of 2026-07-21 21:13 · Market cap $58.8B
As of 2026-07-15, Lumentum Holdings Inc. (LITE) looks overvalued. Dolphy estimates a fair value of $540.00 versus a current price of $837.56 — a 55% premium to fair value.
Executive summary
Lumentum is the purest large-cap play on optics for AI datacenters, and the numbers show why the stock has re-rated: quarterly revenue ran $480.7M → $533.8M → $665.5M → $808.4M across the last four quarters (Mar'26 up ~90% YoY), operating margin swung from deeply negative to 21.7%, and gross margin recovered to 44%. That is a genuine, high-quality inflection driven by the Cloud & Networking segment feeding hyperscaler AI/ML build-outs.
The debate is not whether the business is good — it is what you are paying. At $755.57 (~$58.8B cap) the stock trades at ~14x FY27E revenue, ~55x EV/EBITDA and ~40x forward non-GAAP EPS, and a reverse-DCF says the price needs ~73% annual FCF growth for five years. My defensible methods (scenario DCFs, EV/revenue and P/E comps) cluster in the $210–$425 range; a probability-weighted fair value is ~$540. In other words, today's price already discounts the bull scenario. I view LITE as a great business trading at a premium to intrinsic value — attractive only if you actively underwrite a multi-year AI-optics super-cycle and can tolerate a wide outcome distribution.
How we value it
Probability-weighted scenarios (DCF + forward multiples), with reverse-DCF check on what price embeds
Every figure is computed from SEC filings by the analyst’s calculator tools and fact-checked by a second, independent model.
Investment thesis
About Lumentum Holdings Inc.
Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. It operates through two segments, Cloud & Networking and Industrial Tech. The Cloud & Networking segment offers optical and photonic chips, components, modules, and subsystems supplied to cloud data center operators, AI/ML infrastructure providers, and network equipment manufacturer customers that are building cloud data centers and network infrastructures. Its Industrial Tech segment provides short-pulse solid-state lasers, kilowatt-class fiber lasers, diode lasers, and gas lasers that serves the semiconductor device, solar cell, display, and electric vehicle and battery manufacturing markets. The company was incorporated in 2015 and is headquartered in San Jose, California.
Frequently asked questions
Is LITE a buy?
As of 2026-07-15, Lumentum Holdings Inc. (LITE) looks overvalued. Dolphy estimates a fair value of $540.00 versus a current price of $837.56 — a 55% premium to fair value.
What is LITE's fair value?
Dolphy's estimated fair value for Lumentum Holdings Inc. (LITE) is $540.00, versus a current market price of $837.56.
Is LITE overvalued or undervalued?
Lumentum Holdings Inc. (LITE) currently looks overvalued — trading at a 55% premium to Dolphy's estimated fair value of $540.00.
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AI-generated research by Dolphy for educational and informational purposes only — not investment advice. Figures are computed from public sources and may contain errors.