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Bear of the Day: Luminar Technologies (LAZR)

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Luminar Technologies (LAZR - Free Report) is a Zacks Rank #5 (Strong Sell) that operates as a vehicle sensor and software company for passenger cars and commercial trucks. The company specialize in lidar sensors and autonomy software solutions.

The stock surged late in 2020, as electric and autonomous car companies became the hottest stocks out there. However, these stocks came down to earth and have struggled to gain any ground throughout 2021.

So far this year, LAZR has traded under 2021 lows in a choppy range. Investors will need to see momentum or the stock is in danger of falling back to its SPAC price of $10.

About the Company

Luminar operates in two segments, Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment deals with lidar sensors, and related perception and autonomy software solutions for original equipment manufacturers in the automobile, commercial vehicle, robo-taxi, and other related industries. The Other Component Sales segment engages in the designing, testing, and consulting of non-standard integrated circuits for government agencies and defense contractors.

Luminar was founded in 2012 and is headquartered in Orlando, Florida. The company employs 500 and has a market cap of $5 billion

The stock has Zacks Style Scores of “A” in Momentum, but “F” in Value. In a market where valuations are being question, the stock is being put aside for now.  

Q4 Earnings

Luminar reported earlier this week, seeing a beat on EPS of 13%. Revenue also beat, coming is slightly ahead of expectations. However, the company guided FY22 revenues below expectations.

While the quarter numbers were fine, investors should take caution, as estimates are flat to lower over the next year.

Estimates

There is some improvement in numbers over the short term, with estimates going from -$0.18 to -$0.16 over the last sixty days for the current quarter. However, for the current year we see them tick lower, going from -$0.54 to -$0.53.

Earnings are pretty fresh, so be on the lookout for the change in these estimates going forward and how they may affect the stock price.

Technical Take

The stock surged in late 2020, going from its SPAC price of $10 to $47.80 in under a month. From there, the stock saw some wild volatility between $25 and $40. Then the bleed began and the stock steadily drifted lower, marking a 2020 low at $11.42.

The stock has seen a nice bounce off those lows, recently jumping above $15 or more than a 30% bounce.

But this current trading level is the 50-day moving average and a spot that has been hard to maintain for the bulls. If the stock can get over the $16 area, it still would have to contend with the $17.50 area, where the 200-day MA is.

Investors should be aware, there is a lot of supply waiting to be sold into these areas. Until both the fundamentals and technicals improve, the stock should be avoided.

In Summary

Luminar was a former high-flyer that some investors fell in love with as the next Tesla type company. However, it will take a lot of time to get going again.

Investors should let this one settle in a bit and look elsewhere until things improve. For now, a better niche auto play might be LCI Industries (LCII). The stock is a Zacks Rank #1 (Strong Buy) and the company is coming off a 15% EPS beat about a month ago.   


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