Applied Opt (AAOI)vsLumentum Holdings Inc (LITE)
AAOI
Applied Opt
$90.11
+17.76%
TECHNOLOGY · Cap: $8.22B
LITE
Lumentum Holdings Inc
$602.35
+15.09%
TECHNOLOGY · Cap: $64.55B
Smart Verdict
WallStSmart Research — data-driven comparison
Lumentum Holdings Inc generates 391% more annual revenue ($2.49B vs $507.00M). LITE leads profitability with a 17.7% profit margin vs -8.6%. LITE appears more attractively valued with a PEG of 0.63. LITE earns a higher WallStSmart Score of 74/100 (B).
AAOI
Hold38
out of 100
Grade: F
LITE
Strong Buy74
out of 100
Grade: B
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Revenue surging 51.4% year-over-year
Conservative balance sheet, low leverage
Growing faster than its price suggests
Revenue surging 90.1% year-over-year
Earnings expanding 71.1% YoY
Large-cap with strong market position
Growing faster than its price suggests
Strong operational efficiency at 21.8%
Areas to Watch
0.0% earnings growth
ROE of -3.9% — below average capital efficiency
Negative free cash flow — burning cash
Distress zone — elevated risk
Trading at 14.5x book value
Elevated debt levels
Premium valuation, high expectations priced in
Distress zone — elevated risk
Comparative Analysis Report
WallStSmart ResearchBull Case : AAOI
The strongest argument for AAOI centers on Revenue Growth, Debt/Equity, PEG Ratio. Revenue growth of 51.4% demonstrates continued momentum. PEG of 0.78 suggests the stock is reasonably priced for its growth.
Bull Case : LITE
The strongest argument for LITE centers on Revenue Growth, EPS Growth, Market Cap. Profitability is solid with margins at 17.7% and operating margin at 21.8%. Revenue growth of 90.1% demonstrates continued momentum.
Bear Case : AAOI
The primary concerns for AAOI are EPS Growth, Return on Equity, Free Cash Flow.
Bear Case : LITE
The primary concerns for LITE are Price/Book, Debt/Equity, P/E Ratio. A P/E of 147.1x leaves little room for execution misses.
Key Dynamics to Monitor
AAOI profiles as a hypergrowth stock while LITE is a growth play — different risk/reward profiles.
AAOI carries more volatility with a beta of 3.69 — expect wider price swings.
LITE is growing revenue faster at 90.1% — sustainability is the question.
LITE generates stronger free cash flow (79M), providing more financial flexibility.
Bottom Line
LITE scores higher overall (74/100 vs 38/100), backed by strong 17.7% margins and 90.1% revenue growth. Both earn "Strong Buy" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Applied Opt
TECHNOLOGY · COMMUNICATION EQUIPMENT · USA
Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber optic networking products globally. The company is headquartered in Sugar Land, Texas.
Lumentum Holdings Inc
TECHNOLOGY · COMMUNICATION EQUIPMENT · USA
Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, Asia-Pacific, Europe, the Middle East, and Africa. The company is headquartered in San Jose, California.
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