Key Takeaways
- Lumentum shares fell 18.6% on Nov. 2 after Marvell Technology agreed to buy the company in a $115 billion all-stock deal.
- Each Lumentum share becomes 4.5 Marvell shares, worth about $771 at Monday’s close, well below the $1,132 headline price.
- Lumentum’s fiscal first-quarter revenue rose 136.5% to $1.26 billion, a beat the deal overshadowed.
- Coherent, which reports Nov. 4, now faces a laser rival with a chipmaker behind it.
Lumentum (LITE) fell 18.6% to $684.40 on Monday, Nov. 2, after Marvell Technology (MRVL) agreed to buy it in a $115 billion all-stock deal. The deal also leaves Coherent (COHR) facing a laser rival with a chipmaker behind it, ahead of Coherent’s Nov. 4 report.
Marvell Chairman and CEO Matt Murphy said AI’s shift toward optical connectivity is “creating an opportunity that comes along once in a generation.” Investors disagreed. Marvell closed down 12.7% at $171.41, and because Lumentum holders are paid in Marvell shares, that drop came straight out of the offer.
A big quarter, buried
Lumentum reported fiscal first-quarter results the same morning. Revenue rose 136.5% from a year earlier to $1.26 billion, non-GAAP EPS of $4.57 beat the $4.22 analysts expected, and Lumentum landed its second major NPO/CPO win, backed by more than $5 billion of purchase commitments.
Going into the report, analysts expected normalized EPS to climb from the $8.67 Lumentum earned in fiscal 2026 to $35.72 in fiscal 2028:
The new guidance supports that path. The first quarter’s $4.57 plus the midpoint of the $5.90-$6.20 second-quarter guide already covers about 49% of the $21.82 analysts expect for fiscal 2027, with half the year still to go.
But holders won’t own that growth on their own: at close, they’ll have about 33% of the combined company.
TIKR tracks 28 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
Lumentum now trades on Marvell’s price
The companies value the deal at about $1,132 a share, a 23.9% premium to Oct. 28 closing prices, set before Bloomberg reported the talks that evening. Marvell’s stock had already slid about 22% from its Oct. 28 close by Friday, and Monday’s drop left it 32% below.
At $171.41, 4.5 Marvell shares were worth about $771. That puts Lumentum’s close about 11% below the deal’s own value, the market’s discount for a closing date in the first half of 2028 and the chance the deal never closes.
Lumentum traded at 39x forward earnings at Friday’s close, above its five-year average of 30x:
On the same estimates, Monday’s close takes it to about 31x, almost back to that average. Marvell’s multiple matters more now: 35x on Friday against a five-year average of 33x, and about 30x after Monday’s drop:
Coherent gets a bigger rival
Coherent trades at about 22x forward earnings, and its fiscal fourth-quarter revenue grew 34%, against Lumentum’s 136.5%. Northland upgraded it to Outperform on Nov. 2, pointing to the value of scarce photonics capabilities. Its Nov. 4 report will show whether the growth gap is narrowing, and whether customers that would rather not buy lasers from a Marvell-owned Lumentum are sending more orders its way.
The wait starts now
The drop makes sense. Holders are swapping a stock whose earnings analysts expect to more than double this fiscal year for a third of the combined company at a similar multiple, and the deal isn’t expected to close until the first half of 2028.
Shareholders and regulators still have to sign off. If the deal falls through, investors will value Lumentum on its own numbers again, and at about 31x forward earnings, those numbers cost less than they did on Friday.
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!
