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For the to-be-reported quarter, Lumentum expects revenues between $630 million and $670 million. LITE expects non-GAAP earnings in the $1.30-$1.50 per share range.
The Zacks Consensus Estimate for revenues is pegged at $652.4 million, indicating an increase of 62.2% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.41 per share, up by a penny over the past 30 days. Lumentum reported earnings of 42 cents in the year-ago quarter.
Consensus Estimate Trend
Image Source: Zacks Investment Research
LITE’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.41%.
Let us see how things have shaped up for the upcoming announcement.
Key Factors to Note Ahead of LITE’s Q2 Results
LITE estimates that more than 60% of its current revenues come from AI infrastructure and cloud, driven by strong demand from hyperscalers. Network equipment and optical transceiver manufacturers are also embedding Lumentum components in their solutions. Both these trends are expected to have continued in the to-be-reported quarter, thereby driving top-line growth.
Lumentum expects sustainable growth from cloud transceivers (flat in the first quarter of 2026) over the next four to five quarters, beginning in the second quarter of fiscal 2026. Continued momentum in data center interconnect (DCI) components, which support not only optical links within campuses but also connections spanning up to 100 kilometers in scale across architectures, is a key catalyst. In the first quarter of fiscal 2026, LITE’s narrow line width laser assemblies for DCI transmission jumped 70% year over year, reflecting strong demand and the company’s success in scaling manufacturing capacity.
Strong demand for laser chip, laser assembly and line subsystem product lines used in data centers, as well as for data center interconnect and long-haul applications, is expected to have driven the components business. LITE achieved record EML laser shipments due to strong sales of 100-gig line speeds and an increase in 200-gig shipments in the first quarter of fiscal 2026. LITE has started delivering CW lasers for 800-Gig transceiver manufacturers, which boosts its prospects. Roughly half of the sequential growth in the second quarter of fiscal 2026 is expected to have been driven by component products serving cloud applications.
LITE’s systems products serving cloud customers, driven by growing demand for high-speed optical transceivers for data center applications is expected to have contributed to the other half of the sequential growth.
LITE Shares Outperform Sector & Peers
Lumentum shares have jumped a whopping 353.3% in a year, outperforming the Zacks Communication Components industry’s return of 119.7% and the broader Zacks Computer and Technology sector’s appreciation of 27.8%. The company has outperformed peers, including Coherent (COHR - Free Report) , Ciena (CIEN - Free Report) and Marvell Technology (MRVL - Free Report) , in the past year. Shares of Coherent and Ciena have returned 138.6% and 191%, respectively, while Marvell Technology has dropped 28%.
LITE Stock’s Performance
Image Source: Zacks Investment Research
The LITE stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price-to-sales (P/S), LITE is trading at 8.84X, higher than the industry and peers. While the industry is trading at 4.42X, Ciena, Coherent and Marvell Technologies trade at 5.85X, 4.67X, and 6.89X, respectively.
LITE Stock is Trading at a Premium
Image Source: Zacks Investment Research
LITE's Prospects Ride on Strong AI Demand
Lumentum’s prospects ride on strong AI demand that is driving the need for its laser chips and optical transceivers inside data centers, as well as in the interconnect and long-haul networks that bring them together. LITE has evolved as a leading provider of optics for scaling AI. Cloud transceivers, optical circuit switches and co-packaged optics are long-term growth drivers for the systems segment. Rapid manufacturing expansion in Thailand bodes well for cloud transceivers and optical circuit switches.
Laser chip shipment is anticipated to remain strong due to the expected addition of 40% more capacity over the next few quarters at the indium phosphide-based wafer fab. Laser chips carry a higher gross margin. Hence, higher shipments are expected to drive earnings. Lumentum currently expects 200-gig EMLs to account for 10% of the sales mix in early calendar 2026 and become a meaningful part of the mix as the year progresses.
The company expects ultra-high power laser shipments to increase significantly in the second half of calendar 2026 as adoption continues to accelerate, and opportunities to expand the customer base to increase. Lumentum expects components product to remain the major revenue and earnings growth driver in the near term. Rapid scaling of the systems with cloud transceivers, optical circuit switches and other high-performance solutions bodes well for the company’s prospects over the long term.
Conclusion
Lumentum’s growing AI infrastructure footprint, thanks to a strong component product portfolio, bodes well for its near-term prospects and justifies a premium valuation.
Image: Bigstock
Lumentum's Q2 Earnings Loom: Should the Stock Be in Your Portfolio?
Key Takeaways
Lumentum (LITE - Free Report) is set to report its second-quarter fiscal 2026 results on Feb. 3.
For the to-be-reported quarter, Lumentum expects revenues between $630 million and $670 million. LITE expects non-GAAP earnings in the $1.30-$1.50 per share range.
The Zacks Consensus Estimate for revenues is pegged at $652.4 million, indicating an increase of 62.2% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.41 per share, up by a penny over the past 30 days. Lumentum reported earnings of 42 cents in the year-ago quarter.
Consensus Estimate Trend
Image Source: Zacks Investment Research
LITE’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.41%.
Lumentum Holdings Inc. Price and EPS Surprise
Lumentum Holdings Inc. price-eps-surprise | Lumentum Holdings Inc. Quote
Let us see how things have shaped up for the upcoming announcement.
Key Factors to Note Ahead of LITE’s Q2 Results
LITE estimates that more than 60% of its current revenues come from AI infrastructure and cloud, driven by strong demand from hyperscalers. Network equipment and optical transceiver manufacturers are also embedding Lumentum components in their solutions. Both these trends are expected to have continued in the to-be-reported quarter, thereby driving top-line growth.
Lumentum expects sustainable growth from cloud transceivers (flat in the first quarter of 2026) over the next four to five quarters, beginning in the second quarter of fiscal 2026. Continued momentum in data center interconnect (DCI) components, which support not only optical links within campuses but also connections spanning up to 100 kilometers in scale across architectures, is a key catalyst. In the first quarter of fiscal 2026, LITE’s narrow line width laser assemblies for DCI transmission jumped 70% year over year, reflecting strong demand and the company’s success in scaling manufacturing capacity.
Strong demand for laser chip, laser assembly and line subsystem product lines used in data centers, as well as for data center interconnect and long-haul applications, is expected to have driven the components business. LITE achieved record EML laser shipments due to strong sales of 100-gig line speeds and an increase in 200-gig shipments in the first quarter of fiscal 2026. LITE has started delivering CW lasers for 800-Gig transceiver manufacturers, which boosts its prospects. Roughly half of the sequential growth in the second quarter of fiscal 2026 is expected to have been driven by component products serving cloud applications.
LITE’s systems products serving cloud customers, driven by growing demand for high-speed optical transceivers for data center applications is expected to have contributed to the other half of the sequential growth.
LITE Shares Outperform Sector & Peers
Lumentum shares have jumped a whopping 353.3% in a year, outperforming the Zacks Communication Components industry’s return of 119.7% and the broader Zacks Computer and Technology sector’s appreciation of 27.8%. The company has outperformed peers, including Coherent (COHR - Free Report) , Ciena (CIEN - Free Report) and Marvell Technology (MRVL - Free Report) , in the past year. Shares of Coherent and Ciena have returned 138.6% and 191%, respectively, while Marvell Technology has dropped 28%.
LITE Stock’s Performance
Image Source: Zacks Investment Research
The LITE stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price-to-sales (P/S), LITE is trading at 8.84X, higher than the industry and peers. While the industry is trading at 4.42X, Ciena, Coherent and Marvell Technologies trade at 5.85X, 4.67X, and 6.89X, respectively.
LITE Stock is Trading at a Premium
Image Source: Zacks Investment Research
LITE's Prospects Ride on Strong AI Demand
Lumentum’s prospects ride on strong AI demand that is driving the need for its laser chips and optical transceivers inside data centers, as well as in the interconnect and long-haul networks that bring them together. LITE has evolved as a leading provider of optics for scaling AI. Cloud transceivers, optical circuit switches and co-packaged optics are long-term growth drivers for the systems segment. Rapid manufacturing expansion in Thailand bodes well for cloud transceivers and optical circuit switches.
Laser chip shipment is anticipated to remain strong due to the expected addition of 40% more capacity over the next few quarters at the indium phosphide-based wafer fab. Laser chips carry a higher gross margin. Hence, higher shipments are expected to drive earnings. Lumentum currently expects 200-gig EMLs to account for 10% of the sales mix in early calendar 2026 and become a meaningful part of the mix as the year progresses.
The company expects ultra-high power laser shipments to increase significantly in the second half of calendar 2026 as adoption continues to accelerate, and opportunities to expand the customer base to increase. Lumentum expects components product to remain the major revenue and earnings growth driver in the near term. Rapid scaling of the systems with cloud transceivers, optical circuit switches and other high-performance solutions bodes well for the company’s prospects over the long term.
Conclusion
Lumentum’s growing AI infrastructure footprint, thanks to a strong component product portfolio, bodes well for its near-term prospects and justifies a premium valuation.
Lumentum currently has a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.