Luminar Technologies: Another Big Order, Still No Respect
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Update - Mar. 22, 2023
Just a crazy downgrade by GS to a $5 price target. The market just gives Luminar no respect for massive deals.
- Goldman Sachs cut its rating on Luminar Technologies (NASDAQ:LAZR) to Sell from Neutral.
- Analyst Mark Delaney said the ratings cut reflected margin risk for LAZR and the premium valuation. While the firm continues to see Luminar as one of the leaders in the very competitive lidar industry with recent design wins in the ADAS/AV ecosystem standing out, the near-term setup is called worrying.
- "We see downside to the company's margin outlook with the company targeting revenue per vehicle of ~$1k which we believe implies ASPs roughly 50-100% higher than key competitors for MEMs/solid state lidar. While Luminar attributes this higher ASP in part to software, and we believe it has some opportunities in this regard, the market for ADAS/AV software is highly competitive and we believe both underlying hardware gross margins, and the tailwind from software, could be lower than the company targets (Luminar targets a long term non-GAAP EBIT margin of 35-40+%)."
- In terms of valuation, Delaney noted Luminar is trading at ~4X the EV/2025 revenue estimate, which is rich in comparison to peers with meaningful customer traction.
- Goldman Sachs assigned a price target of $5 to the LiDAR stock.
Update - Feb. 24
Luminar Tech. seeing some follow through buying interest. The market finally appears interested in the large forward order book in the lidar space.
Original article posted on Feb. 23
- Luminar Tech. continues to expand the order book to limited excitement from the stock market.
- The Lidar sensor company likely now has an order book of $5-6 billion over the next 5 years.
- LAZR stock isn't priced for this order book size or the potential for annual revenues to top $1 billion by 2026.
The Autotech space continues to fail to garner any respect from the stock market. Luminar Technologies (NASDAQ:LAZR) announced a multi-billion dollar deal expansion and the stock valuation is possibly still below the value of this one deal alone. My investment thesis is ultra Bullish on the Lidar company shifting towards ADAS and away from a requirement for fully autonomous driving in order to reach large production deals.
Read the full article on Seeking Alpha.
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