Is Lumentum Holdings, Inc. overvalued or undervalued?

As of 3 October 2025, the valuation grade for Lumentum Holdings, Inc. has moved from expensive to attractive, indicating a shift in perception towards the stock's value. Based on the available metrics, Lumentum appears to be undervalued given its current price of 163.81, especially when considering its Price to Book Value of 6.43 and an EV to Capital Employed ratio of 2.84. The company’s EV to Sales ratio stands at 5.01, which, while high, reflects the unique position it holds in the electronics and appliances industry.
In comparison to its peers, Lumentum's valuation ratios are significantly higher; for instance, Generac Holdings, Inc. has a P/E ratio of 30.37 and an EV to EBITDA of 18.40, while Belden, Inc. shows a much lower P/E of 24.33 and an EV to EBITDA of 15.64. Despite these high ratios, Lumentum's recent stock performance has been impressive, with a year-to-date return of 95.13% compared to the S&P 500's 14.18%, suggesting strong market confidence in its future prospects.