Lumentum stock forecast
Lumentum’s weighted value is $728.31 in October 2027, a 13% loss. It hinges on continued earnings growth, profitable production ramps and cash conversion as the valuation multiple compresses.
Where could Lumentum’s shares be by 2029?
Weighted value is $728.31 in October 2027, a 13% loss. It is $813.14 in October 2029, a 2% loss, with dividends included. The forecast assigns 30% probability to bear and 50% to base. Bull has 20% probability.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 30% | 406.84 (-51%) | 237.76 (-71%) | 251.09 (-70%) |
| Base | 50% | 791.07 (-5%) | 869.09 (+4%) | 900.59 (+8%) |
| Bull | 20% | 1053.62 (+27%) | 1305.56 (+57%) | 1437.60 (+73%) |
| Weighted | 100% | 728.31 (-13%) | 766.99 (-8%) | 813.14 (-2%) |
What this means. The weighted row is the average value after giving more weight to the bear and base cases than to the bull case, based on their probabilities.
What has to go right or wrong for Lumentum?
The base case assumes AI demand continues, 1.6T products and optical switches add volume, and Greensboro begins contributing after qualification. Investment and working capital limit cash conversion, while valuation compression offsets much of the earnings growth. The shares move from $791.07 to $900.59. The 50% probability reflects the balance between strong guidance and execution risks.
The bear row falls to $2,014M and then $1,410M before recovering to $1,581M, reflecting an inventory correction and lower utilization. The bull row reaches $2,646M and then $3,440M before ending at $4,085M, requiring sustained AI demand, 1.6T and switch adoption, and better yields. Recent estimate beats and the R300’s more-than-$100M quarterly run rate support the upside, but the historical EBITDA fall to $95.1M shows why the bear remains credible.
How much cash does Lumentum really make?
Stock compensation adds a second reading. It does not appear as another cash payment in the cash-flow statement, but it compensates employees with ownership. Subtracting it from free cash flow therefore produces a more demanding measure of the cash return available to existing shareholders. On that basis, the latest recovery looks much less generous, and the five-year cumulative picture is weaker still.
| Jun 2026 | Jun 2025 | Jun 2024 | Jul 2023 | Jul 2022 | |
|---|---|---|---|---|---|
| = Free cash flow | 300.1 | -104.7 | -112.3 | 51.3 | 368.1 |
| − Stock pay | 170.2 | 177.2 | 128.8 | 148.4 | 103.1 |
| = Real free cash flow | 129.9 | -281.9 | -241.1 | -97.1 | 265.0 |
| Free cash flow, % of revenue | 10.0% | -6.4% | -8.3% | 2.9% | 21.5% |
| Real free cash flow, % of revenue | 4.3% | -17.1% | -17.7% | -5.5% | 15.5% |
What this means. Stock pay is subtracted even though it uses no cash because giving employees shares reduces what each existing shareholder owns.
What does an investor pay for Lumentum today?
Lumentum’s price assumes that strong optical demand will become sustained profit and cash flow. Its equity value is $77,796.4 million, while enterprise value—the value of the operating business after accounting for debt and cash—is $76,695.4 million. Yet investors are paying 25.4 times trailing revenue, before the company pays its workers, factories, and suppliers.
| Today (Oct 16, 2026) | |
|---|---|
| Share price | 832.41 |
| Market value (calculated) | 77,796.4 |
| Enterprise value (calculated) | 76,695.4 |
| P/E, next 12 months (calculated) | 38.4x |
| Free cash flow yield (calculated) | 0.4% |
| Real free cash flow yield (calculated) | 0.2% |
What this means. The last-12-month price-to-earnings measure is not meaningful because the company lost money over that period.