Lumentum Holdings Inc (LITE)
Return on equity (ROE)
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -546,500 | -131,600 | 198,900 | 397,300 | 135,500 |
| Total stockholders’ equity | US$ in thousands | 957,300 | 1,355,800 | 1,875,000 | 1,972,800 | 1,749,200 |
| ROE | -57.09% | -9.71% | 10.61% | 20.14% | 7.75% |
June 30, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-546,500K ÷ $957,300K
= -57.09%
Lumentum Holdings Inc's return on equity (ROE) has shown a downward trend over the past five years. In June 2020, the ROE was 7.75%, indicating a moderate return on equity. However, there was a significant decline in the subsequent years, with ROE falling to 20.14% in June 2021, 10.61% in June 2022, and further dropping to -9.71% in June 2023. This negative trend continued as of June 2024, with ROE plummeting to -57.09%.
The consistent decrease in ROE reflects a deterioration in the company's ability to generate profit from its shareholders' equity. A negative ROE, as observed in 2024, suggests that the company's net income is insufficient to cover shareholder equity, resulting in a loss on equity capital.
This declining ROE trend signals potential financial concerns for Lumentum Holdings Inc, indicating a decreasing profitability and efficiency in generating returns for its shareholders. Further analysis of the company's financial performance and strategy may be required to address the root causes of the declining ROE and implement corrective measures.
Peer comparison
Jun 30, 2024