Lumentum Holdings Inc. [NASDAQ:LITE] shares were trading -11.50% to $77.34 on Wednesday. Comparativley, The S&P 500 is trading at -1.77%. For the year, the stock is trading 10.20% and the five-day change stands at 1.23%.
LITE’s next earning date is 10/29/2020. Currently, the company is booking earnings per share of 1.74 with the price-to-cash-flow at 12.51.
The company is also reporting 1.74 earnings per share.
The Bears are coming
Holding a Market Cap of $6.51 billion, Lumentum Holdings Inc. has seen a trading range over the last year of $48.44-$96.74.
For the last five days, LITE is up from its last closing price. The average shares trading hands each day is 1.48M, with average 10-day volume coming in at 0.87 million.
Using a Force Index Indicator is a good way to look at how strong actual buying and selling pressure is for LITE. When we apply the Elder Force Index to Lumentum Holdings Inc., we are seeing an Elder Force Indicator number of -19468468.05.
Recent Performance
The recent performance of the stock is another area that can tell traders how to proceed. LITE is presenting an interesting case. This can be seen in the Forward P/E ratio, which currently stands at 13.34. Moreover, the company’s enterprise value has gone from $5.84B to $5.38B quarter-over-quarter. Obviously, the company is heading in the wrong direction, but there are still opportunities for growth in the sector.
In the last quarter, LITE made a profit of 135.7 million. Lumentum Holdings Inc. also saw quarter revenue growth year over year of 7.24%. In addition, the company has operating cash flow of $524.3 million.
Technical Analysis
Looking at popular technical indicators, the company’s 5-day moving average is 84.54 compared to the 50-day moving average of 88.18. So, traders might want to tread carefully if they are going to bid.
The Relative Strength Index or RSI is an indicator ranging between 0 and 100 that traders use to determine if a stock is “overbought” or “oversold.” A strong uptrend tending to reach into the “overbought” status is above 70, while a downward trend will stay around the 30 mark. LITE currently holds a 9-day RSI of 27.80%, while 100-day RSI stands at 50.05%.
Another indicator we believe is worth keeping tabs on is the Moving Average Convergence Divergence or MACD. Similar to the concept of the Force Index — on the basis of price momentum — the MACD gives traders a tool to measure the turning point of a stock even during rapid fluctuations in price. Buy and sell signals are determined by a stock’s relation to the zero line, so if a stock is above a zero line for many weeks it might be a “buy.” On the other hand, if a stock is below the zero line consistently, it might be one to stay away from. Also, if the MACD line reaches a peak and dips, its momentum may be waning. LITE’s 9-day MACD is -0.85 and the company’s 100-day MACD stands at 2.64.
Inside Moves
Another area that is important to analyze is insider moves and majority shareholders. While this is not always an error-free way to tell what the future holds for a stock, you can maybe gather important information from reading the tea leaves about who is buying and selling.
The major holders for this stock are 0.47% by insiders and 96.80% by institutions. Regarding institutional holdings, Wellington Management Company, LLP owns 13.71%, while the second top holder, Vanguard Group, Inc. (The), currently owns 9.39%.
Over the last six months, insiders have sold 18,597 with the most recent transaction from LOWE ALAN S, Chief Executive Officer, with a sell at price 86.28 per share.
Conclusion
Overall, the recommended rating for LITE is Moderate Buy. Currently, the company has 16 analysts watching the stock, and the average quarterly earnings estimate is 1.47. Quarterly revenue estimates are averaging 443.06M with the high estimate reaching 449.2M and the low at 436.6M.
To review, the current 1-year target estimate is sitting at 106.87, while the current price 77.34. Based on this, we expect the stock to rise considering the aforementioned fundamentals.
