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Factors to Consider Ahead of Velodyne's (VLDR) Q4 Earnings

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Velodyne Lidar, Inc. (VLDR - Free Report) is slated to release fourth-quarter 2020 results on Feb 25, after the closing bell. This will be the second time that the lidar manufacturer will be releasing quarterly numbers as a public company. In the last reported quarter, Velodyne incurred loss per share of 6 cents, narrower than the Zacks Consensus Estimate of a loss of 18 cents. The firm reported third-quarter 2020 revenues of 32 million, marginally surpassing the consensus estimate of 30 million.

The Zacks Consensus Estimate for fourth-quarter loss of 13 cents per share has remained stable for the past 90 days. The consensus mark for fourth-quarter revenues is pegged at $16 million.

Things to Note

Velodyne’s leading position in the LIDAR market on the back of its first-mover advantage, broad product portfolio, and around 300 customers including major auto and tech companies are likely to positively impact the firm’s fourth-quarter results.

During the October-December period, Velodyne entered into several agreements that sparked optimism for the firm. It inked a multi-year sales pact with Local Motors to power the latter’s self driving vehicle with its Puck™ and Velarray H800 sensors. The three-year sales agreement with Baidu (BIDU - Free Report) for Alpha Prime™ lidar sensors is also likely to have boosted top-line growth. During the to-be-reported quarter, Velodyne also signed sales deals for Velarray H800 and Alpha Prime™ sensors with May Mobility, Motional and Ford Otosan — a subsidiary of Ford (F - Free Report) .

Importantly, Velodyne shipped more than 4,100 sensors during fourth-quarter 2020, higher than the prior quarter’s 2,235 sensor units. New projects in the December quarter boosted its project pipeline to 183 from 175 reported in third-quarter 2020.

While the above-mentioned factors seem to have aided the firm’s fourth-quarter earnings, COVID-related disruptions played spoilsport. During the quarter to be reported, production capabilities at its San Jose factory were disrupted, particularly in the latter half of the quarter, hindering the company’s ability to deliver customers’ orders. Due to these unexpected disruptions, Velodyne recently announced that it failed to meet its revenue guidance. The company expects fourth-quarter 2020 revenues in the band of $15.5-$16 million, implying a significant decline from $32 million recorded in the last reported quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Velodyne this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Velodyne — whose closest peer is Luminar Technologies (LAZR - Free Report) — has an Earnings ESP of 0.00% and carries a Zacks Rank #4 (Sell).

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