Lumentum HoldingsXTER:LU2 -0.99%62 Return-on-Tangible-Equity is 122.60% as of Mar. 2026, which is 1358% above its 10-year median of 8.41. GuruFocus rates XTER:LU2 with a GF Score™ of 62/100 and a GF Value™ of €85.70 (Significantly Overvalued). The stock has 4 warning signs investors should review. Among 2,379 Hardware companies, Lumentum Holdings ranks better than 99.96% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Lumentum Holdings's annualized net income for the quarter that ended in Mar. 2026 was €499 Mil. Lumentum Holdings's average shareholder tangible equity for the quarter that ended in Mar. 2026 was €407 Mil. Therefore, Lumentum Holdings's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 122.60%.
The historical rank and industry rank for Lumentum Holdings's Return-on-Tangible-Equity or its related term are showing as below:
XTER:LU2'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -17.88 Med: 8.41 Max: 32.75
Current: Negative Tangible Equity
During the past 13 years, Lumentum Holdings's highest Return-on-Tangible-Equity was 32.75%. The lowest was -17.88%. And the median was 8.41%.
XTER:LU2's Return-on-Tangible-Equity is ranked better than 99.96% of 2379
companies
in the Hardware industry
Industry Median: 5.26
vs XTER:LU2: Negative Tangible Equity
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Lumentum Holdings Return-on-Tangible-Equity Related Terms
Lumentum Holdings Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Lumentum Holdings's Return-on-Tangible-Equity 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.
XTER:LU2 vs MSI, CIEN, HPE: Return-on-Tangible-Equity Comparison
For the Communication Equipment subindustry, Lumentum Holdings's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Hardware Industry
For the Hardware industry and Technology sector, Lumentum Holdings's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Lumentum Holdings's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 122.60% mean?
Lumentum Holdings (XTER:LU2) has a Return-on-Tangible-Equity of 122.60% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Lumentum Holdings and its competitors. This is 1358% above median its historical median of 8.41. According to the industry distribution chart, Lumentum Holdings ranks #1 out of 2379 companies in the Hardware industry, placing it in the top 0%.
Is Lumentum Holdings' Return-on-Tangible-Equity too high?
Lumentum Holdings' current Return-on-Tangible-Equity of 122.60% is 1358% above median its 10-year median of 8.41. The Hardware industry median Return-on-Tangible-Equity is 5.26. Lumentum Holdings' value of 122.60% is 2230.8% above this industry median. Based on the distribution chart, Lumentum Holdings ranks #1 out of 2379 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 62/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Lumentum Holdings' Return-on-Tangible-Equity compare to MSI and CIEN?
According to the Hardware industry distribution chart, Lumentum Holdings ranks #1 out of 2379 companies for Return-on-Tangible-Equity. This places Lumentum Holdings in the top 0% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 5.26. Lumentum Holdings' value of 122.60% is 2230.8% above this benchmark. While the company's 10-year median is 8.41 vs. the industry median of 5.26, Lumentum Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Hardware company?
The median Return-on-Tangible-Equity among Hardware companies is 5.26, based on 2,379 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Lumentum Holdings's current Return-on-Tangible-Equity of 122.60% is 2230.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Lumentum Holdings and its competitors. For the Hardware industry, the median Return-on-Tangible-Equity is 5.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Lumentum Holdings's current Return-on-Tangible-Equity is 122.60%, which is 1358% above median its own 10-year median of 8.41. 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 (XTER:LU2) is currently considered Significantly Overvalued. The stock's GF Value™ is €85.70, compared to a current price of €652.00 — trading 660.8% above its estimated fair value. The current Return-on-Tangible-Equity is 122.60%, which is 1358% above median its 10-year median of 8.41 and 2230.8% above the Hardware industry median of 5.26. Lumentum Holdings' overall GF Score™ is 62/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Lumentum Holdings (XTER:LU2), the current Return-on-Tangible-Equity is 122.60% 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 (XTER:LU2) Overvalued in 2026?
Based on GuruFocus' analysis, Lumentum Holdings stock appears to be overvalued.
The current stock price of €652.00 is trading 660.8% above its estimated GF Value™ of €85.70.
GuruFocus considers Lumentum Holdings to be Significantly Overvalued.
Key valuation signals for XTER:LU2:
Return-on-Tangible-Equity: 122.60% (1358% above median its 10-year median of 8.41)
GF Value™: €85.70 vs. price of €652.00 (660.8% above fair value)
Industry Position: 2230.8% above the Hardware median (#1 of 2379)
No single metric tells the full story. See the XTER:LU2 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.
62GF Score
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