- In May, Lumentum announced it expected the global 3D-sensing market to slow by 20-25% in FY22. That is a massive downgrade from previous expectations.
- The stock adjusted quickly and sharply lower as that would have been an excellent time to buy. But for those who missed that opportunity, the stock still looks good here.
- Higher margins, an excellent ROADM business, solid long-term growth potential, a $700 million two-year stock buyback plan, and sitting on $2 billion in cash are all positive catalysts.
- Bottom line: LITE could earn $6.50/share in FY22. A P/E=15x infers a $97.50 12-month target. That is up 23% from Friday's close. LITE is a Buy.
For further details see:
Lumentum: 3-D Sensing Bloom Is Off The Rose (For Now), But The Stock Is Still A Buy