Lumentum: Purchase Obligations Are Exploding And Here's Why That Matters (Rating Upgrade)
Lumentum Holdings Inc. is experiencing a significant increase in purchase obligations, indicating strong demand and potential revenue growth. The company's backlog in OCS systems and CPO lasers is expected to convert into sales in the latter half of 2026 and into fiscal year 2027. Additionally, supply constraints in EMLs and lasers are contributing to the positive outlook for Lumentum.
- ▪Lumentum's purchase obligations have surged, indicating strong demand visibility.
- ▪The backlog in OCS systems and CPO lasers is expected to convert to sales in H2 2026 and FY27.
- ▪Tight supply and sold-out demand in EMLs and lasers are worsening, supporting Lumentum's growth prospects.
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