Cisco Systems, Inc. (CSCO) vs Lumentum Holdings Inc. (LITE)

Cisco Systems, Inc. and Lumentum Holdings Inc. are both Communication Equipment companies. Cisco Systems, Inc. is the larger, with a market value of $422.0B against $84.7B — 5.0× the size. Lumentum Holdings Inc. has negative trailing earnings, so its P/E is not meaningful; Cisco Systems, Inc. trades at 31.8×. Lumentum Holdings Inc. grew revenue faster over the last twelve months: 83.2% against 11.8%. Cisco Systems, Inc. has the higher net margin (21.0% vs −230.1%) and the higher return on invested capital (17.9% vs 9.26%). Across the 21 metrics below, Cisco Systems, Inc. leads on 16 and Lumentum Holdings Inc. on 5.

Valuation

Metric CSCO LITE Communication Equipment median
P/E 31.84 n/m 33.61
P/S 6.66 23.31 2.16
P/B 8.39 15.13 2.40
Price to free cash flow 33.03 205.10 25.02
EV/EBITDA 23.74 86.91 13.78
EV/Sales 6.71 22.94 2.27
Earnings yield 3.14% (8.66%) (0.65%)
Free cash flow yield 3.03% 0.49% 1.61%

Profitability

Metric CSCO LITE Communication Equipment median
Gross margin 64.52% 41.67% 39.47%
Operating margin 24.27% 17.41% 2.39%
Net margin 20.95% (230.10%) (0.74%)
Free cash flow margin 20.16% 11.36% 1.39%
Return on equity 27.32% (240.03%) (1.91%)
Return on assets 10.53% (120.34%) (0.20%)
Return on invested capital 17.87% 9.26% 0.72%

Growth

Metric CSCO LITE Communication Equipment median
Revenue growth (TTM) 11.77% 83.22% 11.48%
EPS growth (last fiscal year) 27.59% (25,224.32%) —
Revenue growth, 5-year CAGR 4.92% 11.58% 4.92%
Net income growth, 5-year CAGR 4.61% 0.00% 0.00%

Health

Metric CSCO LITE Communication Equipment median
Debt to equity 0.39 0.35 0.06
Current ratio 0.93 1.68 2.01
Net debt to EBITDA 0.19 (1.38) 0.67

Dividend

Metric CSCO LITE Communication Equipment median
Dividend yield 3.15% — 2.63%
Payout ratio 0.50 0.00 0.00

Size

Metric CSCO LITE Communication Equipment median
Market cap 422.01b 84.66b 563.45m

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