Tired Bulls Liquidating Lumentum Holdings Inc (NASDAQ:LITE)?


Shares in Lumentum Holdings Inc (NASDAQ:LITE) fell sharply Monday, continuing their downward momentum after the company declared its earnings report last week.

The stock plunged 10.28% to end the day at $33.60 on volume of 3.51 million shares.

Lumentum is a manufacturer of innovative optical and photonic products for optical networking and commercial laser customers globally.

Technically, on the monthly chart, the stock has just formed a highly bearish engulfing candle – a pattern that usually signifies further declines in price.

Lumentum Holdings Inc (NASDAQ:LITE) declares a good FQ1

For the FQ1, Lumentum declared EPS of $0.49 which was ahead of estimates by $0.05 and revenue of $258.1 million, which beat by $5.77 million, was up an impressive 21.4% year on year and exceeded the high end of the company’s own guidance.

“We achieved record revenues of $258.1 million and grew approximately 7% sequentially, and 21% year-over-year,” said Alan Lowe, president and CEO in a statement. “Operating margins were 12.7% as we generated favorable operating leverage from higher volume. On a year-over-year basis, Telecom revenue was up 25%, Datacom revenue was up 24%, and Commercial Lasers were up 12%.”

Lumentum Holdings Inc (NASDAQ:LITE) price targets raised by analysts

Analysts at Stifel reiterated their Buy rating on the stock and raised the price target from $42 to $45.

Needham also reaffirmed their rating of a Strong Buy and boosted their price target from $50 to $56.

However, it appears that the sector as a whole is underperforming, triggered by the fall in Infinera after its Q3 earnings report.

Lumentum Holdings Inc (NASDAQ:LITE): tired bull liquidation

Lumentum is up 134.31% over the year, and up 135.79% over its 52-week low, despite recent declines. Year to date the stock is up 52.59%.

It is possible that the declines post-the earnings report are nothing but profit-booking by tired bulls.

However, there is a strong possibility of the correction continuing.


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