Morning Watch list (ROA ->a financial ratio): Lumentum Holdings Inc. (NASDAQ:LITE)

Lumentum Holdings Inc. (NASDAQ:LITE) attracting analysts when it go through a change of 21.83% in the current trading session to trade at $51.90. The company has a market cap of $2.82B.

Lumentum Holdings Inc. recently stated results for its fiscal second quarter ended December 30, 2017.

Net revenue for the fiscal second quarter of 2018 was $404.6 million, with GAAP net income of $204.8 million, or $3.17 per diluted share.  Net revenue for fiscal first quarter of 2018 was $243.2 million, with GAAP net income of $7.1 million, or $0.11 per diluted share. Net revenue for the fiscal second quarter of 2017 was $265.0 million, with GAAP net income of $11.8 million, or $0.19 per diluted share.

Non-GAAP net income for the fiscal second quarter of 2018 was $107.8 million, or $1.67 per diluted share. Non-GAAP net income for fiscal first quarter of 2018 was $27.8 million, or $0.43 per diluted share. Non-GAAP net income for the fiscal second quarter of 2017 was $35.9 million, or $0.57 per diluted share. The Company held $624.5 million in total cash and short-term investments at the end of the fiscal second quarter of 2018.

Business Outlook

The Company anticipates the following for the fiscal third quarter 2018:

  • Net Revenue to be in the range of $280 million to $305 million
  • Non-GAAP Operating margin of 15.5% to 18.0%
  • Non-GAAP diluted earnings per share of $0.65 to $0.80;

    Note:  Earnings per share based on about 65 million shares outstanding on a fully diluted basis

Our projection of 65 million shares outstanding does not comprise the potentially dilutive effect of the convertible notes, as we have the ability and intent to settle the face value in cash; and therefore, we use the treasury stock method for calculating the dilutive impact of the 2024 Notes. The notes will have an impact on our non-GAAP diluted earnings per share when the average price of our common stock exceeds the conversion price of $60.62.

Looking at the stock’s movement on the chart, Lumentum Holdings Inc. have shares float of 22.28%.

Technical traders may be staring at recent indicator levels on shares of Lumentum Holdings Inc. (LITE). Trading was heavy with 6,502,317 shares changing hands by the end of trading on Tuesday. Given that its average daily volume over the 30 days has been 2.29M shares a day, this signifies a pretty significant change over the norm.

LITE Growth Evolution:

Lumentum Holdings Inc.  (NASDAQ:LITE) has shown an EPS growth of 0 in the last 5 years and sales growth of 6.60% for the same year while for the next 5 years; the EPS growth estimates 18.50%.Along with this Sales growth yoy (quarter over quarter) was considered as -5.80%.

A statistical measure of the dispersion of returns (volatility) for LITE producing salvation in Investors mouth, it has week volatility of 6.06% and for the month booked as 4.69%. Regardless of which metric you utilize, a firm understanding of the concept of volatility and how it is measured is essential to successful investing. A stock that maintains a relatively stable price has low volatility. When investing in a volatile security, the risk of success is increased just as much as the risk of failure.

Keeping an eyeball on Gross profit Margin, Net profit Margin & Operating Margin, the Gross profit margin of 30.90%; the net profit margin of -9.40% while its Operating margin was 3.40% for Lumentum Holdings Inc. (LITE). Operating margin and profit margin both measure the efficiency of a firm by comparing profits against costs at three different spots on an income statement. On their own, these margins do not tell much of a story, but they are very useful when compared to past periods or to competitor firms in the same industry.

Comparing Operating and Profit Margin

If there is a huge discrepancy between a company’s profit margin (particularly its gross margin) and its operating margin, it suggests that the company is more efficient in creating and selling its products, but perhaps less efficient in managing training, administration, research or other day-to-day business costs.

The return on assets (ROA) (aka return on total assets, return on average assets), is one of the most widely used profitability ratios because it is related to both profit margin and asset turnover, and shows the rate of return for both creditors and investors of the company. Return on assets is -8.20% and Return on equity (ROE) is -16.60% while it’s Return on Investment (ROI) of 0.50%.

Beta is also an important valuation ratio for analyzing the stock of the company, LITE’s beta remains at 0. The Free Cash Flow or FCF margin is 0. For the most recent quarter, quick ratio was 4.40, current ratio was 5.20, LT Debt/Equity ratio was 0.51 and Total Debt/Equity ratio stands at 0.51, while Payout ratio is 0.