NPTN - Lumentum Seeing Painful Supply Shortages But Underlying Demand Is Strong
- Lumentum's fiscal second quarter results were hit by ongoing supply shortages, and those shortages are not letting up soon.
- Underlying demand for optical networking equipment is strong and likely to support a multiyear period of double-digit growth for Lumentum, but supply constraints are a gating issue today.
- I think the bulls are a little too excited about the long-term opportunities in 3D sensing, but I do expect adoption in Android handsets, AR/VR, and ADAS to drive growth.
- High single-digit revenue growth, improving FCF margins, and a 30% pro forma operating margin in FY'23 can support a double-digit return from here.
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Lumentum Seeing Painful Supply Shortages, But Underlying Demand Is Strong