Growth Is Accelerating

Luminar is a fast-growing company valued at over $2.6 billion. The company is building lidar technologies that are expected to grow rapidly in the next few years. As a result, analysts expect the company to show a lot of growth in the next decade.

Luminar’s revenue in 2022 came in at over $40 million up from the previous year’s $31 million. Analysts were expecting the company’s revenue to be over $80 billion. Data compiled by SeekingAlpha shows that analysts expect its revenue to be $86 million this year. They see it hitting $256 million in 2024 and $4.8 billion in 2030.

That’s excellent growth for a company that started shipping its products a few years ago. Analysts also believe that Luminar will remain in a loss-making territory in the next three years. Its annual loss for this year will be 77 cents per share followed by 49 and 13 cents per share in the following two years.

Therefore, for a company that is still burning cash, what really matters is the strength of its balance sheet. In this case, the company needs to be able to fund its growth while avoiding shareholder dilution.

Luminar’s cash hoard has been strong for a while but it is falling. The company ended last quarter with over $422 million in cash and short-term investments. Cash stood at over $89 million while short-term investments came in at over $322 million. 

While this is a strong number, it is also lower than the $706 million it had in the same quarter in 2022. Still, I believe that the company has the funds it needs to fund its growth while avoiding shareholder dilution.

What next for LAZR stock price?

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Luminar is not widely followed in Wall Street. Most Wall Street analysts who follow the company have lowered their target. Citigroup and Cowen downgraded their forecast for the stock to $18 and $10, respectively. The only bullish analysts are from Jefferies and Goldman Sachs.

I believe that Luminar is a good company that is set to narrow its losses in the coming years. The company hopes to turn a positive gross profit later this year. I also see it growing its revenues well in the same period. 

Therefore, my rating for LAZR stock price is neutral with a bullish bias. I believe that the shares could retest the year-to-date high of $10.28 later this year.

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