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Lumentum Holdings Inc. (0JVV.L)

LSE - LSE Delayed price. Currency in USD
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90.83-0.68 (-0.74%)
At close: 03:54PM BST

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  • P
    Hi Michael,
    Thanks in advance. Are you surprised Lite used all cash to buy NPTN? NPTN was a $900 million deal, minus NPTN’s cash. I accidentally posted this on NPTN’s message board. No one is going to read it anyway. As of today NPTN doesn’t exist anymore.
  • P
    I can’t believe the merger happened this fast. NPTN is a mini version of Lite. There’s not a lot of difference in their products. Thus the quick merger. The IIVI/Coherent merger took much longer because they are two very different companies. Lite is doubling down on their products with NPTN adding revenue and some differentiation. There will be some overlap that can be sold off in the future. I don’t see that happening right away because we are in a semiconductor shortage. Lite needs extra capacity. NPTN offers that.
  • P
    Lite can’t satisfy ROADM demand. NPTN make ROADMs also. Lite needs the extra capacity.
  • d
    LITE looks like it is about to drop. Be careful guys. I have been reading ( and their stocks have been doing way better.
  • P
    Lite is outperforming today. The market likes the deal.
  • P
    I can think of three reasons why LITE has a good balance sheet. Oclr had a lot of cash for a company that small. It’s because they had good margins. Lite has good margins. The last one is the breakup fee for the Coherent merger.
  • I
    After hours? And iPhone sales had a big beat???
  • p
    Be still my beating heart. After hours must have been a fluke
  • n
    hopefully after hours is just a misprint
  • S
    Looks like we got NPTH for bobkees😎🤓🤪
  • P
    Copy and Paste from SeekingAlpha:

    Note the main reason that LITE is acquiring NPTN is that their own coherent module developments were failing. Among other things, LITE’s product management went with the NEL DSP for 400 ZR/ZR+ instead of the IPHI DSP that NPTN used. Thus it was easier to buy NPTN to participate in the pluggable optics market vs. a renewed development from scratch. People associated with the failed LITE efforts have left the company….
    Me again:
    They are doubling down on Data Center which I think is growing faster than any other part of the laser market. I think 3D sensing will be big also. But not in the way I thought. It’s going to be used in virtual headsets among other things. The phone business flattened out. I think 2023 will be a huge year. They will start saving on synergies because of the NPTN merger. Automotive and Lidar and hopefully VR might take off then also. This so reminds of the OCLR merger. OCLR was bought out at a cheap price also. They were profitable unlike NPTN but realized the only way to compete was being part of a much larger company. NPTN has greatly increased their revenues but not profitability. They are also to concentrated in just several companies. OCLR had the same problem. The concentration and lack of profitability will go away after the merger eventually.
  • m
    Analyst Alex Henderson from Needham reiterated a Buy rating on Lumentum Holdings (LITE), with a $125 price target.
  • P
    I am thinking now that the NPTN transaction was more important than I thought. I think it’s going to have an immediate impact on Lite. They probably will hit the ground running as soon as the transaction closes. The structure of the integration has probably been figured out already. Lite already loaned them 30 million dollars so they are intimately familiar with the company. OCLR made an instant impact albeit they had slightly more revenue and were profitable already. However, NPTN’s revenues have basically doubled in a little over one year. 900 million for NPTN is a good deal for them and Lite. There will be synergies of course just like OCLR. Just not as much because NPTN is a smaller company than OCLR was. I feel there is nothing left to buy after this transaction closes. The only small company left that I can think of is AAOI which is all legacy and know one will touch them. They are running out of cash also. LITE got OCLR’s cash which was significant at the time. That’s not going to be the case with NPTN. OCLR had very high margins that produced a lot of cash. They just had trouble growing as a stand alone company. NPTN’s revenues have grown significantly since Lite made that buyout offer. The 30 million dollar loan had something to do with that for sure. However, they are getting a bigger company than they paid for.
  • W
    Does anyone have an idea, when the merger will close? Is it this month?
  • S
    @ Michael. Did you place a limit order or you waiting until will start defending Taiwan 🤪🤓😎
    Market is in pooper. Buy low, sell high.
  • M
    Here are a few ideas not related to point & figure charts that I think we can all agree on:

    1) Analysts have very little credibility
    2) Much of the movement of an individual stock price is driven by the movement of the overall market and the sector
    3) It helps to think more market neutral than fall in love with a bullish or bearish narrative
    4) Thinking about ideas like I listed in my previous post helps frame the problem of how you should be positioned in an individual stock. I don't know the answers but I do know the questions I'd be asking management during the conference call.

    It would be great to get some good discussion going prior to the conference call next week.
  • B
    Just read their August earnings transcript here:
    My takeaways are the company is the leader in their various markets, especially 3D sensing where they are by far the largest vendor with the highest quality and the ONLY company able to scale with no quality issues. They are growing strongly in 5G and data center and currently have a $150M backlog which will take at least 3 quarters to meet because new orders keep coming in. Margins are improving and with the new Iphone coming soon with world-facing 3D sensing camera, both sales/margins should remain strong going forward. Company has net cash position with no debt due in the next few years, which gives them flexibility.
    Unlike competitors, they are having to add capacity to keep up with strong demand. They have been investing heavily in R&D, which will allow them to release great new tech and expect to maintain the lead in their data/vcsel chips for foreseeable future. Even with the COVID-related headwinds and Huawei ban, their sales/eps/margins are still growing nicely.
  • A
    A friend says that a 700 Million buy back of shares would/will reduce the number of shares by 13% . (Assuming they buy at or near current levels). That would also increase earnings per share by 13%. So, as you said in a Bullish scenario we would assume LITE would return to previous 52 week high on 112 so if we add 13% on top of 112 we get a price of 127 within the next 12 to 18 months. Note if sales increase significantly, the price could and will go much higher.
  • B
    The latest broker upgrades I have are as follows.... (conformation welcome).

    B. Riley restated a “buy” rating and issued a $71.00 price target (up previously from $68.00) on shares of Lumentum in a research note on Friday. Craig Hallum restated a “buy” rating and issued a $75.00 price target (up previously from $60.00) on shares of Lumentum in a research report on Friday. Jun Zhang, Rosenblatt Securities, reiterated a ‘buy’ with a sp target of $80 yesterday on shares of Lumentum.