LITE · Nasdaq · CIK 1633978
Lumentum Holdings Inc.
Stage 1 · Must have
2/7
6 of 7 needed
Stage 2 · Refinement
73%
70% needed
Verdict
Financially weak
Rules v1.0.0
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Stage 1 · Must have
2 of 7 passed · at least 6 needed
Debt / Equity
Financial debt compared with shareholders' equity
Pass0.70Threshold < 1FY 2026< 1
Debt / equity: 0.70 in 2026, below the limit of 1. The company relies more on shareholders' money than on borrowing, which leaves room to absorb a weak year.
S1.1 · Source: 2026 annual report, SEC EDGAR · Original filing
Gross margin vs. industry
Gross profit as a share of revenue, compared with peers
Fail41.7%Threshold >= 68.2% (median 67.2% + 1 pp)FY 2026>= 68.2% (median 67.2% + 1 pp)
Gross margin: 41.7% in 2026, against a median of 67.2% for Technology (90 companies). The company keeps less of each unit of revenue after direct costs than the bar set by its peers. Its products may face stronger competition or higher production costs.
Compared with 90 companies in Technology. Peer median 67.2%.
S1.2 · Source: 2026 annual report, SEC EDGAR · Original filing
Operating cash flow vs. net income
Cash from operations over reported profit, last 3 years
Failn/aThreshold > 100% (3-year sums)FY 2026> 100% (3-year sums)
Net income summed over the last 3 years is zero or negative, so there is no profit for cash flow to back up. The check counts as not met.
S1.3 · 3 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Free cash flow vs. net income
Cash left after investment over reported profit, last 3 years
Failn/aThreshold > 80% (3-year sums); 70-80% is closeFY 2026> 80% (3-year sums); 70-80% is close
Net income summed over the last 3 years is zero or negative, so there is no profit to turn into free cash flow. The check counts as not met.
S1.4 · 3 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
ROIC stable and rising
Return on invested capital over 5 years
Fail9.2%Threshold >= 0.9% (median 1.9% - 1 pp) and >= 15.1% (2021 + 0.5 pp)FY 2026>= 0.9% (median 1.9% - 1 pp) and >= 15.1% (2021 + 0.5 pp)
ROIC: 9.2% in 2026, against a median of 1.9% over 2021-2026 and 14.6% in 2021. The return is steady but has not improved on the start of the period, so the check for a rising trend is not met.
S1.5 · 6 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Return on equity vs. industry
Net income over shareholders' equity, compared with peers
Fail-149.3%Threshold >= 13.3% (median 12.3% + 1 pp)FY 2026>= 13.3% (median 12.3% + 1 pp)
Return on equity: -149.3% in 2026, against a median of 12.3% for Technology (90 companies). The company earns less on its shareholders' capital than the bar set by its peers. Each unit of equity produces comparatively little profit.
Compared with 90 companies in Technology. Peer median 12.3%.
S1.6 · Source: 2026 annual report, SEC EDGAR · Original filing
Positive EBITDA
Operating profit before depreciation and amortization
Pass$654MThreshold > 0FY 2026> 0
EBITDA: USD 653.6 million in 2026. The core business makes money before depreciation, interest and tax, so day-to-day operations pay for themselves.
S1.7 · Source: 2026 annual report, SEC EDGAR · Original filing
Company snapshot
Market dataMarket data widgets by TradingView. Market prices are not part of the EdgeScore model.
Stage 2 · Refinement
8 of 11 applicable passed · at least 70% needed
SG&A stable or falling
Overhead costs as a share of revenue, over 5 years
Pass12.1%Threshold <= 18.1% (median 17.6% + 0.5 pp)FY 2026<= 18.1% (median 17.6% + 0.5 pp)
SG&A: 12.1% of revenue in 2026, against a median of 17.6% over 2021-2026. Overhead costs are not growing faster than the business, a sign of cost discipline.
S2.1 · 6 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Interest coverage
Operating income over interest expense
Pass24.1xThreshold > 5FY 2026> 5
Interest coverage: 24.1x in 2026. Operating income covers interest costs comfortably, so debt payments are unlikely to strain the business.
S2.2 · Source: 2026 annual report, SEC EDGAR · Original filing
Net margin vs. industry
Net income as a share of revenue, compared with peers
Fail-230.1%Threshold >= 6.7% (median 5.7% + 1 pp)FY 2026>= 6.7% (median 5.7% + 1 pp)
Net margin: -230.1% in 2026, against a median of 5.7% for Technology (90 companies). After all costs, interest and tax, the company keeps less of its revenue as profit than the bar set by its peers.
Compared with 90 companies in Technology. Peer median 5.7%.
S2.3 · Source: 2026 annual report, SEC EDGAR · Original filing
ROA vs. industry
Net income over total assets, compared with peers
Fail-94.9%Threshold >= 5.0% (median 4.0% + 1 pp)FY 2026>= 5.0% (median 4.0% + 1 pp)
Return on assets: -94.9% in 2026, against a median of 4.0% for Technology (90 companies). The company produces less profit from the assets it holds than the bar set by its peers.
Compared with 90 companies in Technology. Peer median 4.0%.
S2.4 · Source: 2026 annual report, SEC EDGAR · Original filing
Current ratio
Current assets over current liabilities
Pass1.68Threshold > 1.5FY 2026> 1.5
Current ratio: 1.68 in 2026. Short-term assets cover the bills due within a year with a good margin.
S2.5 · Source: 2026 annual report, SEC EDGAR · Original filing
Total assets growing, 5 years
Average yearly growth of total assets
Pass15.5%Threshold average growth > 0%, at most 1 year with a drop over 2%FY 2026average growth > 0%, at most 1 year with a drop over 2%
Total assets grew 15.5% a year on average over 6 annual reports, with 1 year of decline beyond 2%. The company has been building its asset base steadily.
S2.6 · 6 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Free cash flow CAGR, 5 years
Average yearly growth of free cash flow
Fail-14.4%Threshold >= 5% a yearFY 2026>= 5% a year
Free cash flow changed -14.4% a year from 2021 to 2026, below the 5% bar. The cash left after investment is not growing much.
S2.7 · 6 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Quick ratio
Current assets excluding inventory over current liabilities
Pass1.40Threshold > 1FY 2026> 1
Quick ratio: 1.40 in 2026. Even without counting inventory, the company can cover the bills due within a year.
S2.8 · Source: 2026 annual report, SEC EDGAR · Original filing
Net debt / EBITDA
Years of operating profit needed to repay net debt
Pass1.8xThreshold < 3FY 2026< 3
Net debt / EBITDA: 1.8x in 2026. Debt net of cash could be repaid from less than three years of operating profit, a manageable load.
S2.9 · Source: 2026 annual report, SEC EDGAR · Original filing
Positive free cash flow
Operating cash flow minus capital expenditure
Pass$300MThreshold > 0FY 2026> 0
Free cash flow: USD 300.1 million in 2026. The business generated more cash than it spent on investment, money it can use for debt, dividends or growth.
S2.10 · Source: 2026 annual report, SEC EDGAR · Original filing
Revenue CAGR, 5 years
Average yearly growth of revenue
Pass11.6%Threshold >= 7% a yearFY 2026>= 7% a year
Revenue grew 11.6% a year from 2021 to 2026. Sales are expanding at a solid pace.
S2.11 · 6 annual reports used · Source: 2026 annual report, SEC EDGAR · Original filing
Indicator guide
- Debt / Equity
- Financial debt divided by shareholders' equity shows how much of the business is funded by lenders. Below 1 means owners fund more of the company than creditors do.
- Gross margin vs. industry
- Gross margin is the share of revenue left after the direct cost of products and services. Beating the industry median by at least one point suggests pricing power or a cost advantage.
- Operating cash flow vs. net income
- Compares three years of operating cash flow with three years of reported profit. Above 100% means accounting profit is fully backed by cash coming in.
- Free cash flow vs. net income
- Free cash flow is operating cash flow minus capital spending, compared with profit over three years. Above 80% means most of the profit is cash the company can actually use.
- ROIC stable and rising
- Return on invested capital measures the profit earned on all money invested in the business, by owners and lenders. The latest value must hold near its five-year median and be higher than five years ago.
- Return on equity vs. industry
- Return on equity is net income divided by shareholders' equity. It is compared with the industry median because normal levels differ a lot between industries.
- Positive EBITDA
- EBITDA is operating profit before interest, taxes, depreciation and amortization. A positive value means the core business earns money before financing and accounting charges.
- SG&A stable or falling
- Selling, general and administrative costs as a share of revenue show how heavy the overhead is. Staying at or below the five-year median means costs are under control.
- Interest coverage
- Operating income divided by interest expense shows how easily the company pays its lenders. Above 5 leaves a wide safety margin if profits fall.
- Net margin vs. industry
- Net margin is the share of revenue that ends up as net profit. It is compared with the industry median to account for different business models.
- ROA vs. industry
- Return on assets is net income divided by total assets. It shows how efficiently the company turns everything it owns into profit, compared with its peers.
- Current ratio
- Current assets divided by current liabilities measures the ability to pay bills due within a year. Above 1.5 indicates a comfortable short-term buffer.
- Total assets growing, 5 years
- Checks that total assets grew on average over five years, with at most one sharp annual decline. The allowed decline depends on the sector, and the check is skipped for software companies.
- Free cash flow CAGR, 5 years
- The average yearly growth rate of free cash flow over five years. At least 5% a year shows the cash a business produces is growing.
- Quick ratio
- Like the current ratio, but without inventory, which can be slow to turn into cash. Above 1 means short-term debts are covered by the most liquid assets.
- Net debt / EBITDA
- Financial debt minus cash, divided by EBITDA, estimates how many years of operating earnings would repay the debt. Below 3 is generally considered manageable.
- Positive free cash flow
- Free cash flow in the latest year must be above zero. It means operations fund investment without new debt or new shares.
- Revenue CAGR, 5 years
- The average yearly growth rate of revenue over five years. At least 7% a year points to a business that keeps expanding.
Data source: SEC EDGAR, company annual reports. Original 10-K (FY 2026). Last updated Oct 29, 2026. Latest fiscal year ends Jun 27, 2026.
How the score works: EdgeScore methodology. Rules version 1.0.0.
For information and education only. Not investment advice. Data may contain errors.