Key Takeaways
- Lumentum shares rose about 8% and Coherent about 11% after Bernstein started coverage of both at Outperform.
- Bernstein said networking and optical suppliers could be “structural winners” within AI infrastructure.
- Lumentum’s fiscal fourth-quarter revenue more than doubled to $1 billion, and it guided to $1.225 billion to $1.275 billion for the current quarter.
- Lumentum’s priced for perfection.
Lumentum Holdings (LITE) shares are up another 8% on Thursday after Bernstein started covering the optical-components maker at Outperform.
Lumentum wasn’t alone. Coherent (COHR) was up about 11% on the same rating. Bernstein declared that networking and optical suppliers could be “structural winners” within AI infrastructure.
Groundhog day
This is the second time in less than a month a new bullish rating has boosted Lumentum. On Sept. 9, TIKR covered an 11% jump after two banks started the stock at Buy.
The stock is up roughly 150% in 2026 and worth about $96.3 billion. That raises the real question: how much good news is already in the price?
Lumentum’s fiscal fourth-quarter revenue rose 109% from a year earlier to $1 billion. Adjusted earnings of $3.23 a share beat the $2.97 consensus. Lumentum guided to $1.225 billion to $1.275 billion of revenue for the fiscal first quarter.
It also shipped twice as many optical circuit switches in the fourth quarter as in the third. These switches steer data between servers as light.
Analysts expect that growth to keep going…
So what’s priced in?
Lumentum is priced at nearly 14x NTM revenue. That’s a steep multiple for a company that makes physical components. (It’s also nowhere near the height – at one point it was nearly at 20x!)
In situations like this, the main risks are the company’s individual execution (obviously an issue for Coherent too, although less so since it’s so much bigger and already profitable), and of course the possibility of deterioration in the macro environment. Interest rates are rising, data centers are under fire, and Anthropic and OpenAI are delaying their IPOs. At this price there’s little room for a stumble.
Structural winner, priced like one
Lumentum is already earning Bernstein’s label. Revenue doubled, and guidance points higher still. The stock already prices much of that in, though. Thursday’s pop reflects investors’ appetite for the whole optics group, and returns from here depend on demand holding up well into 2027.
Of course, management has called its demand signals for 2027 “incredibly strong.” The next earnings report will show whether laser supply is catching up.
So what is Lumentum stock actually worth?
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!
