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Last week, Luminar Technologies (LAZR) gave its first business update since becoming a publicly traded entity in December. It’s safe to say, the market liked the news. Shares gained 16% in the subsequent session as investors digested what’s in-store for the lidar maker.
Northland analyst Gus Richard was among those impressed.
“The key takeaway is the Company continues to be the leading automotive Lidar company as it moves toward commercialization in 2022,” said the 5-star analyst. “Also consistent with our checks LAZR makes a compelling case the designs are sticky as it would be costly to re-write software.”
Luminar expects CY21 revenue to come in between $25 million to $30 million, compared to the Street’s – and Richard’s - $26 million forecast.
Capex is expected in the $10 million to $15 million region, with total cash spend expected to hit $140 million, below the $154 million in proceeds from the sale of warrants in 1Q21. By the end of CY21, the company expects its forward orders to increase to at least $1.8 billion from the current $1.3 billion.
Luminar is looking to secure a number of production wins in CY21, and already announced the first. The company is partnering with SAIC, China’s largest automotive company. One of Luminar’s 2021 targets is to finish off the alpha version of its full-stack Sentinel software, which will be integrated into SAIC's new R brand vehicles. Series production is slated to kick off in 2022.
Once the full-stack software is included, Richard believes the company can charge $2,500 per unit, far more than the $1000 the company currently charges for its sensor and perception software.
Richard thinks China is “going the extra mile to enable autonomous driving,” and due to the government's ability to dictate regulations without much resistance, expects the country to be the first where “higher-levels of autonomy will emerge.”
Richard summed up, “LAZR is the first company to have production nominations in the region that is likely to lead in AVs, putting LAZR in pole position for level 3 and above and we believe it is the lidar leader.”
All in all, the Northland analyst sticks to an Outperform (i.e. Buy) rating for the shares, along with a $38 price target. The implication for investors? Potential upside of 26%. (To watch Richard’s track record, click here)
Richard’s take aside, the rest of the Street is split when considering Luminar’s prospects; 2 additional Buys and Holds, each, add up to a Moderate Buy consensus rating. The average price target currently stands at $34, indicating gains of 13% in the year ahead. (See LAZR stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.