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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Lumentum Holdings's Degree of Operating Leverage for the quarter that ended in Mar. 2026 was -3.07. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Lumentum Holdings's Degree of Operating Leverage or its related term are showing as below:
LITE's Degree of Operating Leverage is ranked better than 78.52% of 2444
companies
in the Hardware industry
Industry Median: 1.025
vs LITE: -3.07
Lumentum Holdings (NAS:LITE) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Lumentum Holdings Degree of Operating Leverage Related Terms
Lumentum Holdings Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Lumentum Holdings's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Lumentum Holdings Degree of Operating Leverage Chart
LITE vs HPE, CIEN, MSI: Degree of Operating Leverage Comparison
For the Communication Equipment subindustry, Lumentum Holdings's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Lumentum Holdings Degree of Operating Leverage vs Hardware Industry
For the Hardware industry and Technology sector, Lumentum Holdings's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Lumentum Holdings's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of -3.07 mean?
Lumentum Holdings (LITE) has a Degree of Operating Leverage of -3.07 as of Mar. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Lumentum Holdings and its competitors. According to the industry distribution chart, Lumentum Holdings ranks #525 out of 2444 companies in the Hardware industry, placing it in the top 21.5%.
Is Lumentum Holdings' Degree of Operating Leverage too high?
Lumentum Holdings' current Degree of Operating Leverage is -3.07. Based on the distribution chart, Lumentum Holdings ranks #525 out of 2444 companies in the Hardware industry, which is in the top quartile — a strong position relative to peers. Overall, Lumentum Holdings has a GF Score™ of 61/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Lumentum Holdings' Degree of Operating Leverage compare to HPE and CIEN?
According to the Hardware industry distribution chart, Lumentum Holdings ranks #525 out of 2444 companies for Degree of Operating Leverage. This places Lumentum Holdings in the top 22% of its industry — outperforming the majority of peers. The industry median Degree of Operating Leverage is 1.03. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Hardware company?
The median Degree of Operating Leverage among Hardware companies is 1.03, based on 2,444 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Lumentum Holdings and its competitors. For the Hardware industry, the median Degree of Operating Leverage is 1.03 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Lumentum Holdings's current Degree of Operating Leverage is -3.07. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lumentum Holdings stock overvalued right now?
Based on GuruFocus' analysis, Lumentum Holdings (LITE) is currently considered Significantly Overvalued. The stock's GF Value™ is $105.30, compared to a current price of $813.51 — trading 672.6% above its estimated fair value. The current Degree of Operating Leverage is -3.07. Lumentum Holdings' overall GF Score™ is 61/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Lumentum Holdings (LITE), the current Degree of Operating Leverage is -3.07 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Lumentum Holdings (LITE) Overvalued in 2026?
Based on GuruFocus' analysis, Lumentum Holdings stock appears to be overvalued.
The current stock price of $813.51 is trading 672.6% above its estimated GF Value™ of $105.30.
GuruFocus considers Lumentum Holdings to be Significantly Overvalued.
Key valuation signals for LITE:
Degree of Operating Leverage: -3.07
GF Value™: $105.30 vs. price of $813.51 (672.6% above fair value)
No single metric tells the full story. See the LITE stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lumentum Holdings Inc is a California-based technology firm. The company provides two types of optical and photonic products: optical components that are used in telecommunications networking equipment, and commercial lasers for manufacturing, inspection, and life-science lab uses. Its segments are Optical Communications and Commercial Lasers. The firm is also expanding into new optical applications, such as 3-D sensing laser diode for consumer electronics. It generates maximum revenue from the OpComms segment. The OpComms segment products include a wide range of components, modules, and subsystems to support customers including carrier networks for access (local), metro (intracity), long-haul, and submarine (undersea) applications.
61GF Score
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