Lumentum Holdings Inc. (NASDAQ:LITE) Just Reported And Analysts Have Been Cutting Their Estimates

Lumentum Holdings Inc. (NASDAQ:LITE) shareholders are probably feeling a little disappointed, since its shares fell 5.4% to US$41.40 in the week after its latest third-quarter results. It was a pretty bad result overall; while revenues were in line with expectations at US$367m, statutory losses exploded to US$1.88 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Lumentum Holdings

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Following the latest results, Lumentum Holdings' 15 analysts are now forecasting revenues of US$1.52b in 2025. This would be a satisfactory 7.2% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 41% to US$3.12. Before this latest report, the consensus had been expecting revenues of US$1.66b and US$2.13 per share in losses. So it's pretty clear the analysts have mixed opinions on Lumentum Holdings after this update; revenues were downgraded and per-share losses expected to increase.

There was no major change to the consensus price target of US$54.44, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lumentum Holdings, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$38.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Lumentum Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.7% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 0.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.6% per year. So it looks like Lumentum Holdings is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Lumentum Holdings. They also downgraded Lumentum Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Lumentum Holdings going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Lumentum Holdings (1 is a bit concerning!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.