- The company is facing secular trends of demand for increased bandwidth most notably from the build-out of 5G, but it is also riding the 3D sensing wave.
- The company, on the back of a strong R&D effort and an acquisition, has also become a more premium player, which is reflected in rising margins.
- The favorable trends are likely to continue for a couple of years, and while already at least in part reflected in the valuation, there is room for some further upside.
- The company is also producing large amounts of cash, which enables it to deleverage.
Lumentum’s Valuation Can Be Stretched Some More
December 10th, 2019 · No Comments