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Is Now the Time to Pull the Trigger on Luminar Stock? This Analyst Says ‘Yes’

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·2 min read
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Luminar Technologies (LAZR) went public through a SPAC merger with Gores Metropoulos in early December, and hardly any Wall Street analysts were covering the stock initially.

However, fast forward to mid-January and the lidar maker is a buzzy name which has quickly gathered a growing list of investment firms eyeing its progress.

The latest to join the fray is R.F. Lafferty’s Jaime Perez.

The analyst initiated coverage of Luminar stock with a Buy rating and $38 price target. Investors could be pocketing gains of 27%, should Perez’ thesis play out accordingly over the next 12 months. (To watch Perez’ track record, click here)

So, what does Perez like about Luminar?

Well, for one, starting next year, leading OEMs including Volvo and Daimler will integrate Luminar’s LIDAR technology into their next generation vehicles.

Second of all, while Luminar estimates its current TAM (total addressable market) is less than $5 billion, it could be worth more than $150 billion by 2030.

“Assuming a ~4% vehicle penetration rate,” Perez notes, “Luminar anticipates it could generate revenues of approximately $5 billion with EBITDA margins of 50% by 2030.”

Perez believes the company’s revenue streams are visible through 2025, based on the $1.3 billion it has already booked in customer backlogs, via its two main lidar products.

The Hydra Lidar sensors are tailored for commercial trucks, can detect objects up to 500 meters away and expand the driver’s peripheral view, so that “truckers will be able to detect objects that are typically in their blind spots.”

Whilst on the self-driving side, for driver-less last-mile delivery trucks and vehicles going back and forth between terminals, the system is vital and can bring down logistics costs by 25% to 30%.

The second major lidar product is the Iris, which caters for the passenger vehicle market and can be seamlessly integrated into the roof of the car.

Perez counts several benefits of using lidar in passenger vehicles which include “proactive safety, greater crash avoidance, improved driver assists in braking, lane-keeping assistance, and better visibility in inclement weather.”

“Most important,” Perez said, “The LIDAR technology could help reduce the number of vehicle-related deaths.”

Turning now to the rest of the Street, where Luminar has 4 additional Buy ratings and 1 Hold, all adding up to a Strong Buy consensus rating. At $37.2, the average price target is set to provide returns of ~25% over the next 12 months. (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.