Summary Overview …
Lumentum has undergone a reasonable size merger at a time cyclical issues are appearing with inventory builds. As sales slow and one time expenses increase the company is looking very expensive factoring in one time expenses related to the merger and transitory issues related to inventory as demand is still strong.
As inventory issues moderate, the acquisition of NeoPhotonics offers an opportunity for growth via a wider complementary product line and a similar customer profile. In both estimates using either the “perpetual growth” model or EV/EBITDA, we fall in the same general region of $102.71 to $114.86 offering fantastic upside from current levels.
Watch with a 7-day free trial
Subscribe to The Bottom-Up Bulletin to watch this video and get 7 days of free access to the full post archives.
