Communications Equipment, NEC
Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers). The OpComms segment offers components, modules, and subsystems that enable the transmission and transport of video, audio, and data over high-capacity fiber optic cables.It offers tunable transponders, transceivers, and transmitter modules; tunable lasers, receivers, and modulators; transport products, such as reconfigurable optical add/drop multiplexers, amplifiers, and optical channel monitors, as well as components, including 980nm, multi-mode, and Raman pumps; and switches, attenuators, photodetectors, gain flattening filters, isolators, wavelength-division multiplexing filters, arrayed waveguide gratings, multiplex/de-multiplexers, and integrated passive modules. This segment also provides Super Transport Blade, which integrates optical transport functions into a single-slot blade; vertical-cavity surface-emitting lasers; directly modulated and electro-absorption modulated lasers; and laser illumination sources for 3D sensing systems. It serves customers in telecommunications, data communications, and consumer and industrial markets. The Commercial Lasers segment offers diode-pumped solid-state, fiber, diode, direct-diode, and gas lasers, such as argon-ion and helium-neon lasers for use in original equipment manufacturer applications. It serves customers in markets and applications, such as sheet metal processing, general manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining. Lumentum Holdings Inc. was incorporated in 2015 and is headquartered in San Jose, California.
Discounted Cash Flow Valuation of Lumentum Holdings Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $70.6M | $91.78M | $116.8M | $145.3M | $176.8M | $210.2M | $244M | $276.6M | $305.8M | $329.6M | $346M | $3.46B |
DCF | $79.81M | $88.29M | $95.54M | $101.1M | $104.5M | $105.5M | $104M | $99.96M | $93.68M | $85.54M | $855.4M | |
Value | $1.813B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 06-2015 | 07-2016 | 06-2017 | 06-2018 | 06-2019 | 06-2020 | 07-2021 | 07-2022 | 06-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | -0.41% | -0.35% | -10% | 19% | -2.4% | 8.1% | 23% | 12% | -7.4% | -25% |
ROA | -4.6% | 1.6% | 3.9% | 9.3% | 0.11% | 7.2% | 15% | 7.6% | -1.4% | -6.8% |
ROE | -0.89% | -0.64% | -17% | 26% | -2.5% | 7.7% | 20% | 11% | -9.7% | -30% |
The average Net Margin over the past 5 years is +8.66%.
The trend of Net Margin over the past 5 years is -2.21%.
The average ROA over the past 5 years is +6.27%.
The trend of ROA over the past 5 years is -0.68%.
The average ROE over the past 5 years is +8.72%.
The trend of ROE over the past 5 years is -3.63%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 06-2015 | 07-2016 | 06-2017 | 06-2018 | 06-2019 | 06-2020 | 07-2021 | 07-2022 | 06-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | - | 0.00 | -8.61 | 2.96 | 2.95 | 3.51 | 2.94 | 7.66 | 54.81 | 35.44 |
Debt Equity | - | 0.00 | 0.74 | 0.49 | 0.32 | 0.88 | 0.97 | 1.50 | 2.07 | 2.13 |
MIN | ||||||||||
Graham Stability | - | - | -7.6K% | - | -84% | 100% | 100% | 100% | -54% | -7.6K% |
The Debt/FCF trailing twelve month is 35.44.
The trend of Debt/FCF over the past 5 years is 7.79.
Graham’s Stability measure stands at -75.66.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 07-2016 | 06-2018 | 06-2020 | 07-2022 | Trend |
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Revenue | 10% | 7.2% | 1.7% | 3.2% | -0.95% |
Net Income | - | - | - | - | -240% |
Stockholders Equity | 15% | 7.9% | -8.1% | -28% | -5.5% |
FCF | 41% | -20% | -51% | -86% | -40% |
The Revenue CAGR over the past 5 years is +7.21%.
The trend of Revenue growth rate over the past 5 years is -0.95%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is -243.15%.
The Equity CAGR over the past 5 years is +7.92%.
The trend of Equity growth rate over the past 5 years is -5.46%.
The FCF CAGR over the past 5 years is -19.77%.
The trend of FCF growth rate over the past 5 years is -39.56%.