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For the to-be-reported quarter, Lumentum expects revenues between $780 million and $830 million. LITE expects non-GAAP earnings in the $2.15-$2.35 per share range.
The Zacks Consensus Estimate for revenues is pegged at $805.4 million, indicating an increase of 89.4% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at $2.24 per share, down by a penny over the past 30 days. Lumentum reported earnings of 57 cents in the year-ago quarter.
Consensus Estimate Trend
Image Source: Zacks Investment Research
LITE’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.64%.
Let us see how things have shaped up for the upcoming announcement.
Key Factors to Note Ahead of LITE’s Q3 Results
Lumentum is expected to have derived approximately two-thirds of the sequential increase in third-quarter fiscal 2026 revenues from its components portfolio, reflecting broad-based strength across cloud applications. The remaining one-third is likely to have come from systems, fueled by the continued ramp-up of high-speed transceivers and additional contributions from OCS.
Lumentum expects sustainable growth from cloud transceivers in the third quarter of fiscal 2026. In the second quarter of fiscal 2026, revenues from cloud transceivers grew significantly and outperformed the legacy cloud-like run rate. The company has emerged as a leading provider of transceiver solutions as customers transition their networks to 1.6T speeds.
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 second-quarter fiscal 2026, LITE’s narrow line-width laser assemblies for DCI transmission gathered strong and sustained momentum, reflecting continued growth in narrow line-width laser assemblies and the long-haul portfolio. This trend is expected to have continued in the to-be-reported quarter.
Strong demand for laser chip, laser assembly and line subsystem product lines used in data centers, as well as for DCI and long-haul applications, is expected to have driven the components business in the third quarter of fiscal 2026.
LITE Shares Outperform Sector & Peers
Lumentum shares have jumped a whopping 167% in the year-to-date period, outperforming the Zacks Communication Components industry’s return of 104.1% and the broader Zacks Computer and Technology sector’s appreciation of 9.9%.
The company has outperformed peers, including Coherent (COHR - Free Report) , Ciena (CIEN - Free Report) and Marvell Technology (MRVL - Free Report) , in the year-to-date period. Shares of Coherent, Ciena and Marvell Technology have returned 80.7%,129.5% and 93.8%, respectively, over the same time frame.
LITE Stock’s Price Performance
Image Source: Zacks Investment Research
Lumentum and Coherent are competitors in high-speed optical modules and transceivers used in data centers and optical links for AI infrastructures. Ciena is a leading provider of optical networking equipment, software and services. Marvell Technology is a competitor in optical networking for AI and data center applications.
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 13.65X, higher than the industry and peers. While the industry is trading at 6.2X, Ciena, Coherent and Marvell Technologies trade at 11.17X, 7.21X and 12.22X, respectively.
LITE Stock is Trading at a Premium
Image Source: Zacks Investment Research
LITE's Prospects Rides on Strong AI Demand
Lumentum’s products are now deeply embedded in AI data center buildouts. The growing need for high-bandwidth, low-latency optical networking to handle increasing AI workloads bodes well for LITE. Multi-year capital expenditure and capacity commitments by hyperscalers are expected to have driven Lumentum’s prospects. Cloud transceivers, optical circuit switches (OCS) and co-packaged optics (CPO) are long-term growth drivers for Lumentum. The supply constraint of indium phosphide is favorable for LITE’s top-line growth, as the company’s production capacity is sold out through 2027 under long-term agreements.
Lumentum has noted strong and expanding demand for OCS, with an order backlog of more than $400 million, the majority of which is slated for shipment in the second half of this calendar year. The company secured an additional multi-hundred-million-dollar purchase order for its ultra-high-power lasers that support optical scale-out applications. LITE expects to begin shipments for this incremental order in the first half of calendar 2027. Shipment of UHP chips is expected to have increased in the second half of calendar 2026. The company’s expanding footprint into the broader pluggable external light source market increases the serviceable market.
Optical scale-up is expanding Lumentum’s total addressable market. Replacement of copper inside racks over time bodes well for the company’s prospects. The company expects to ship its first scale-up CPO, which is set to replace longer copper connections by late calendar 2027.
Conclusion
Lumentum’s growing AI infrastructure footprint, supported by a strong component product portfolio, bodes well for its near-term prospects. However, stretched valuation and stiff competition remains a concern.
View the Zacks #1 Rank List
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Lumentum Q3 Earnings Loom: Buy or Sell the Stock Ahead of Results?
Key Takeaways
Lumentum (LITE - Free Report) is set to report its third-quarter fiscal 2026 results on May 5.
For the to-be-reported quarter, Lumentum expects revenues between $780 million and $830 million. LITE expects non-GAAP earnings in the $2.15-$2.35 per share range.
The Zacks Consensus Estimate for revenues is pegged at $805.4 million, indicating an increase of 89.4% from the year-ago quarter’s reported figure. The consensus mark for earnings is pinned at $2.24 per share, down by a penny over the past 30 days. Lumentum reported earnings of 57 cents in the year-ago quarter.
Consensus Estimate Trend
Image Source: Zacks Investment Research
LITE’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.64%.
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 Q3 Results
Lumentum is expected to have derived approximately two-thirds of the sequential increase in third-quarter fiscal 2026 revenues from its components portfolio, reflecting broad-based strength across cloud applications. The remaining one-third is likely to have come from systems, fueled by the continued ramp-up of high-speed transceivers and additional contributions from OCS.
Lumentum expects sustainable growth from cloud transceivers in the third quarter of fiscal 2026. In the second quarter of fiscal 2026, revenues from cloud transceivers grew significantly and outperformed the legacy cloud-like run rate. The company has emerged as a leading provider of transceiver solutions as customers transition their networks to 1.6T speeds.
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 second-quarter fiscal 2026, LITE’s narrow line-width laser assemblies for DCI transmission gathered strong and sustained momentum, reflecting continued growth in narrow line-width laser assemblies and the long-haul portfolio. This trend is expected to have continued in the to-be-reported quarter.
Strong demand for laser chip, laser assembly and line subsystem product lines used in data centers, as well as for DCI and long-haul applications, is expected to have driven the components business in the third quarter of fiscal 2026.
LITE Shares Outperform Sector & Peers
Lumentum shares have jumped a whopping 167% in the year-to-date period, outperforming the Zacks Communication Components industry’s return of 104.1% and the broader Zacks Computer and Technology sector’s appreciation of 9.9%.
The company has outperformed peers, including Coherent (COHR - Free Report) , Ciena (CIEN - Free Report) and Marvell Technology (MRVL - Free Report) , in the year-to-date period. Shares of Coherent, Ciena and Marvell Technology have returned 80.7%,129.5% and 93.8%, respectively, over the same time frame.
LITE Stock’s Price Performance
Image Source: Zacks Investment Research
Lumentum and Coherent are competitors in high-speed optical modules and transceivers used in data centers and optical links for AI infrastructures. Ciena is a leading provider of optical networking equipment, software and services. Marvell Technology is a competitor in optical networking for AI and data center applications.
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 13.65X, higher than the industry and peers. While the industry is trading at 6.2X, Ciena, Coherent and Marvell Technologies trade at 11.17X, 7.21X and 12.22X, respectively.
LITE Stock is Trading at a Premium
Image Source: Zacks Investment Research
LITE's Prospects Rides on Strong AI Demand
Lumentum’s products are now deeply embedded in AI data center buildouts. The growing need for high-bandwidth, low-latency optical networking to handle increasing AI workloads bodes well for LITE. Multi-year capital expenditure and capacity commitments by hyperscalers are expected to have driven Lumentum’s prospects. Cloud transceivers, optical circuit switches (OCS) and co-packaged optics (CPO) are long-term growth drivers for Lumentum. The supply constraint of indium phosphide is favorable for LITE’s top-line growth, as the company’s production capacity is sold out through 2027 under long-term agreements.
Lumentum has noted strong and expanding demand for OCS, with an order backlog of more than $400 million, the majority of which is slated for shipment in the second half of this calendar year. The company secured an additional multi-hundred-million-dollar purchase order for its ultra-high-power lasers that support optical scale-out applications. LITE expects to begin shipments for this incremental order in the first half of calendar 2027. Shipment of UHP chips is expected to have increased in the second half of calendar 2026. The company’s expanding footprint into the broader pluggable external light source market increases the serviceable market.
Optical scale-up is expanding Lumentum’s total addressable market. Replacement of copper inside racks over time bodes well for the company’s prospects. The company expects to ship its first scale-up CPO, which is set to replace longer copper connections by late calendar 2027.
Conclusion
Lumentum’s growing AI infrastructure footprint, supported by a strong component product portfolio, bodes well for its near-term prospects. However, stretched valuation and stiff competition remains a concern.
Lumentum currently carries a Zacks Rank #3 (Hold), which implies that investors should wait for a favorable point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.