Key Takeaways
- Lumentum fell 10% today as AI data-center stocks sold off after the election, with Marvell and Coherent down too.
- Marvell is paying in its own stock, so every drop in Marvell’s shares cuts what Lumentum holders get.
- Analysts expect Lumentum’s normalized EPS to more than quadruple from fiscal 2026 to fiscal 2028.
- Coherent’s report later today is the first read on orders since the vote.
Lumentum (LITE) fell 10% today while the broader market rose. Democrats swept both chambers of Congress and won key governors’ races on pledges of a tougher stance on data-center construction, and AI data-center stocks sold off.
Lumentum took a double hit: Marvell Technology (MRVL), which agreed on Monday to buy it with its own shares, fell 8%. Coherent (COHR) sold off too.
The premium went negative
Marvell is paying 4.5 of its shares for each Lumentum share, a deal valued at $115 billion, or about $1,132 a share, at announcement. Lumentum still sank 19% on the news.
Gary Black, managing partner of The Future Fund, warned Tesla bulls hoping for an all-stock SpaceX buyout in a post on X: “a +24% premium can quickly go negative as the acquirer’s stock is sold down.”
At Tuesday’s close, 4.5 Marvell shares were worth about $774, and Lumentum closed more than 10% below that. That gap reflects a wait until the first half of 2028 for the deal to close, and some doubt that it closes at all.
Lumentum’s own business is humming
Lumentum’s fiscal first quarter, reported alongside the deal, saw revenue rise 136.5% to $1.26 billion. Analysts expected normalized EPS to more than quadruple from fiscal 2026 to fiscal 2028:
Nothing in that quarter points to cuts. At Tuesday’s close, Lumentum traded at 26x forward earnings, below its five-year average of 30x:
At today’s price, it’s even lower, but holders now collect through Marvell’s shares.
TIKR tracks 26 analysts on Lumentum. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Lumentum, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Lumentum’s Analyst Ratings
Coherent reports tonight
Tougher state rules on new data-center sites would test demand across the whole chain, including the parts Lumentum’s CEO said in October are effectively sold out through early 2029.
Coherent sells the same optics with no deal attached and fell 7%, close to Lumentum’s drop. Its outlook later today, after a fiscal first quarter guided to $2.2 billion to $2.4 billion of revenue, is the first read on orders since the vote.
Celestica (CLS), down 10%, guided on Oct. 26 to $40.0 billion of 2027 revenue, with CEO Rob Mionis citing “customer demand forecasts meaningfully higher for 2028.”
Lumentum now trades with Marvell
Nothing in the latest numbers from Lumentum, Coherent or Celestica points to weaker orders. But until the deal closes, Lumentum holders are paid in Marvell’s shares, so Marvell’s report in early December matters to them as much as Lumentum’s own. Of course, if state rules do slow new data-center sites, Marvell feels it too.
So what is Lumentum stock actually worth if the deal doesn’t go through?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Lumentum could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
