Lumentum Holdings Inc (NASDAQ:LITE) has been one of the top-performing stocks in 2026, with a year-to-date gain of 135.3%. Shares of the telecommunications equipment supplier are up 1,276% over the past year.
After third-quarter results, analysts are racing to raise their price targets, suggesting there could be even more upside for current investors and for those who missed out earlier this year.
• Lumentum Holdings stock is trading at elevated levels. What’s ahead for LITE stock?
Lumentum Q3 Financials
Lumentum reported third-quarter revenue of $808.4 million, up 90.1% year-over-year. The revenue total narrowly missed an optimistic Street consensus target of $809.1 million.
The company’s quarterly earnings per share of $2.37 easily beat a Street target of $2.17.
Lumentum has beaten analyst estimates for earnings per share in 12 straight quarters. On the revenue side, the company has missed estimates for two straight quarters, while beating estimates 11 straight quarters before the recent misses.
Components revenue was $533.3 million in the third quarter, up 77.3% year-over-year.
Systems revenue of $275.1 million was up 121.1% year-over-year.
Overall revenue of $808.4 million was a company record.
CEO Michael Hurlston called the third quarter results “exceptional.”
“While our top-line growth continues to garner headlines, the more impressive part of our recent performance has been our margin expansion. In fiscal Q3, gross margin improved by 540 basis points on quarter and operating margin by 700 basis points,” Hurlston said.
The Lumentum CEO said margins have been helped by product mix, like strength in laser chips. The CEO said earnings could get even better in the future with key growth drivers like co-packaged optics and optical circuit switches.
The company guided for fourth quarter revenue to be in a range of $960 million to $1.01 billion, which would break the recent record quarter by a significant margin. The company reported revenue of $480.7 million in last year’s fourth quarter, which means the new estimate is year-over-year growth of 99.7% or more.
Guidance for fourth-quarter earnings per share is a range of $2.85 to $3.05.
Bullish Analysts Get Even More Bullish
Multiple analysts have raised their price targets since the company’s third-quarter results and updated guidance. Take a look at these new price targets:
- Stifel: Maintained Buy rating, raised price target from $800 to $1,100
- Rosenblatt: Maintained Buy rating, raised price target from $900 to $1,300
- Morgan Stanley: Maintained Equal-Weight rating, raised price target from $710 to $900
- TD Cowen: Maintained Hold rating, raised price target from $875 to $995
- JPMorgan: Maintained Overweight rating, raised price target from $950 to $1,130
- UBS: Maintained Neutral rating, raised price target from $455 to $960
- Barclays: Maintained Equal-Weight rating, raised price target from $750 to $1,000
The analysts who had Neutral ratings on the stock aren’t calling for investors to sell and have raised price targets to keep up with the current share gains.
The stock closed Friday at $903.43. This means that even the analysts who had Neutral ratings still see some level of upside to the current share price.
Bullish analysts have now had to raise their price targets significantly due to the recent stock run. With a price target of $1,300, Rosenblatt now sees upside of 43% to the share price on top of the already impressive run.
Photo Courtesy: Piotr Swat on Shutterstock.com
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