Is Lumentum Holdings, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Lumentum Holdings, Inc. has moved from very expensive to expensive, indicating a shift towards a less favorable valuation outlook. The company appears to be overvalued based on its current metrics, particularly with a Price to Book Value of 6.43, an EV to Sales ratio of 5.01, and a significantly negative EV to EBITDA of -566.97.
In comparison to its peers, Lumentum's valuation stands out, with Generac Holdings, Inc. showing a more attractive P/E of 30.37 and Acuity Brands, Inc. at a fair P/E of 38.19. This suggests that Lumentum's high valuation ratios may not be justified when compared to more reasonably priced competitors. Additionally, Lumentum has significantly outperformed the S&P 500 with a YTD return of 96.27% versus 13.30%, but this strong performance does not alleviate concerns about its overvaluation relative to its peers.