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nLIGHT Soars 58% in 3 Months: Is the Stock Still Worth Buying?
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Key Takeaways
LASR shares jumped 58% in three months, fueled by Q2 beat and raised A&D outlook.
Q2 A&D revenues hit $40.7M, up 49% Y/Y, now 66% of total sales.
Product gross margin rose to 38.5% from 30.3% on a defense-heavy mix.
nLIGHT (LASR - Free Report) shares have surged 58.2% in the past three months, outperforming the Zacks Electronics - Semiconductors industry’s growth of 19.9%. A better-than-expected result for the second quarter of 2025, strong forward guidance and growth in the Aerospace and Defense (A&D) segment have instilled investors’ confidence in the company’s long-term prospects.
The stock also outperformed its industry peers, including Ambarella (AMBA - Free Report) , Broadcom (AVGO - Free Report) and Allegro MicroSystems (ALGM - Free Report) . In the past three months, shares of Broadcom, Ambarella and Allegro MicroSystems have gained 44%, 56.9% and 2.1%, respectively .
This outperformance of nLIGHT shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
3 Month Price Return Performance
Image Source: Zacks Investment Research
LASR Benefits From Strong Growth in A&D
nLIGHT’s second-quarter 2025 revenues grew 22% year over year to $61.7 million and surpassed the Zacks Consensus Estimate of $55 million. The company reported non-GAAP EPS of 6 cents, a significant improvement from the year-ago quarter’s loss of 10 cents. It also compared favorably with the consensus estimate of a loss of 9 cents.
The A&D end market was the primary growth engine for nLIGHT’s second-quarter results. In the second quarter, A&D end market delivered record revenues of $40.7 million, up 49% year over year and making up 66% of total sales compared with 54% a year ago. Moreover, the sequential growth of 24% in the A&D revenues also signals ongoing momentum, not just a one-time spike.
By leaning more on A&D, nLIGHT is tapping into areas like directed energy systems, missile defense, and laser sensing, all of which are long-term funding priorities for the Department of Defense (DoD). With defense programs benefiting from rising spending in the United States and among allied nations, A&D provides both visibility and durability to LASR’s revenue base.
In the second quarter, revenues from defense products were especially strong, growing 74.5% year over year, supported by shipments into the HELSI-2 program. Notably, the HELSI-2 program is a $171 million U.S. DoD contract to build a 1-megawatt high-energy laser by 2026. It is also advancing work on the Army’s DE M-SHORAD short-range air defense system, with field testing expected to progress per schedule. In addition, during the last earnings call, management highlighted growing opportunities under the Golden Dome missile defense initiative and new international wins in directed energy.
Laser sensing is another area gaining traction, with products used in missile guidance, range finding, and countermeasures. Several classified programs are moving into the next phase and could add revenues later this year and beyond. Together, these efforts have given management confidence to raise its full-year A&D growth outlook to at least 40%, up from 25% earlier.
The commercial segment showed some sequential recovery, but management remains cautious on broader industrial demand. Still, nLIGHT’s focus on defense, its manufacturing execution, and strong pipeline suggest that the company’s growth path in 2025 will be shaped largely by its ability to deliver on A&D programs. The Zacks Consensus Estimate for 2025 revenues is pegged at 234.3 million, suggesting an increase of around 18% year over year.
Image Source: Zacks Investment Research
Defense-Heavy Sales Aid nLIGHT’s Margin Gains
In the second quarter, nLIGHT’s Gross margins surged on the back of a defense-heavy mix. The company’s product gross margin reached 38.5%, up from 30.3% a year ago and 33.5% in the prior quarter. This showed the benefit of shifting toward defense-heavy sales.
Management credited the margin boost to several factors, which include higher shipment volumes, a business mix that leaned heavily toward defense products, better use of factory capacity, and strong execution from its manufacturing teams. A&D now makes up two-thirds of total revenues, and defense shipments, such as HELSI-2 amplifiers, were a major driver of the quarter’s upside.
Looking ahead, margins may ease back. For the third quarter, nLIGHT guided product gross margin to the 32-36% range, reflecting a more cautious outlook. Management noted that second-quarter performance benefited from a handful of small things that went unusually well, and they are not counting on all of those repeating. While management guided to some normalization in the third quarter, the second quarter results prove that nLIGHT can achieve margin upside when defense dominates the mix.
LASR Stock Trades at Discounted Valuation
nLIGHT is currently trading at a lower price-to-sales (P/S) multiple compared to the industry. LASR’s forward 12-month P/S ratio sits at 5.97X, significantly lower than the industry’s forward 12-month P/S ratio of 9.01X.
LASR Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
nLIGHT stock also trades at a lower P/S multiple compared with other industry peers, including Broadcom, Ambarella and Allegro MicroSystems. At present, Broadcom, Ambarella and Allegro MicroSystems have P/S multiples of 23.52X, 8.94X and 6.16X, respectively.
Conclusion: Buy nLIGHT Stock Right Now
nLIGHT’s record A&D revenues, margin leverage, and discounted valuation make the stock a compelling investment option. Execution on HELSI-2, M-SHORAD, and laser sensing programs will be key to attaining 40% growth in A&D revenues this year. Moreover, sustaining margin improvements alongside revenue growth would support a stronger path to nLIGHT’s profitability, which presents a compelling buying opportunity for investors.
Image: Bigstock
nLIGHT Soars 58% in 3 Months: Is the Stock Still Worth Buying?
Key Takeaways
nLIGHT (LASR - Free Report) shares have surged 58.2% in the past three months, outperforming the Zacks Electronics - Semiconductors industry’s growth of 19.9%. A better-than-expected result for the second quarter of 2025, strong forward guidance and growth in the Aerospace and Defense (A&D) segment have instilled investors’ confidence in the company’s long-term prospects.
The stock also outperformed its industry peers, including Ambarella (AMBA - Free Report) , Broadcom (AVGO - Free Report) and Allegro MicroSystems (ALGM - Free Report) . In the past three months, shares of Broadcom, Ambarella and Allegro MicroSystems have gained 44%, 56.9% and 2.1%, respectively .
This outperformance of nLIGHT shares raises the question: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
3 Month Price Return Performance
Image Source: Zacks Investment Research
LASR Benefits From Strong Growth in A&D
nLIGHT’s second-quarter 2025 revenues grew 22% year over year to $61.7 million and surpassed the Zacks Consensus Estimate of $55 million. The company reported non-GAAP EPS of 6 cents, a significant improvement from the year-ago quarter’s loss of 10 cents. It also compared favorably with the consensus estimate of a loss of 9 cents.
The A&D end market was the primary growth engine for nLIGHT’s second-quarter results. In the second quarter, A&D end market delivered record revenues of $40.7 million, up 49% year over year and making up 66% of total sales compared with 54% a year ago. Moreover, the sequential growth of 24% in the A&D revenues also signals ongoing momentum, not just a one-time spike.
By leaning more on A&D, nLIGHT is tapping into areas like directed energy systems, missile defense, and laser sensing, all of which are long-term funding priorities for the Department of Defense (DoD). With defense programs benefiting from rising spending in the United States and among allied nations, A&D provides both visibility and durability to LASR’s revenue base.
In the second quarter, revenues from defense products were especially strong, growing 74.5% year over year, supported by shipments into the HELSI-2 program. Notably, the HELSI-2 program is a $171 million U.S. DoD contract to build a 1-megawatt high-energy laser by 2026. It is also advancing work on the Army’s DE M-SHORAD short-range air defense system, with field testing expected to progress per schedule. In addition, during the last earnings call, management highlighted growing opportunities under the Golden Dome missile defense initiative and new international wins in directed energy.
Laser sensing is another area gaining traction, with products used in missile guidance, range finding, and countermeasures. Several classified programs are moving into the next phase and could add revenues later this year and beyond. Together, these efforts have given management confidence to raise its full-year A&D growth outlook to at least 40%, up from 25% earlier.
The commercial segment showed some sequential recovery, but management remains cautious on broader industrial demand. Still, nLIGHT’s focus on defense, its manufacturing execution, and strong pipeline suggest that the company’s growth path in 2025 will be shaped largely by its ability to deliver on A&D programs. The Zacks Consensus Estimate for 2025 revenues is pegged at 234.3 million, suggesting an increase of around 18% year over year.
Image Source: Zacks Investment Research
Defense-Heavy Sales Aid nLIGHT’s Margin Gains
In the second quarter, nLIGHT’s Gross margins surged on the back of a defense-heavy mix. The company’s product gross margin reached 38.5%, up from 30.3% a year ago and 33.5% in the prior quarter. This showed the benefit of shifting toward defense-heavy sales.
Management credited the margin boost to several factors, which include higher shipment volumes, a business mix that leaned heavily toward defense products, better use of factory capacity, and strong execution from its manufacturing teams. A&D now makes up two-thirds of total revenues, and defense shipments, such as HELSI-2 amplifiers, were a major driver of the quarter’s upside.
Looking ahead, margins may ease back. For the third quarter, nLIGHT guided product gross margin to the 32-36% range, reflecting a more cautious outlook. Management noted that second-quarter performance benefited from a handful of small things that went unusually well, and they are not counting on all of those repeating. While management guided to some normalization in the third quarter, the second quarter results prove that nLIGHT can achieve margin upside when defense dominates the mix.
LASR Stock Trades at Discounted Valuation
nLIGHT is currently trading at a lower price-to-sales (P/S) multiple compared to the industry. LASR’s forward 12-month P/S ratio sits at 5.97X, significantly lower than the industry’s forward 12-month P/S ratio of 9.01X.
LASR Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
nLIGHT stock also trades at a lower P/S multiple compared with other industry peers, including Broadcom, Ambarella and Allegro MicroSystems. At present, Broadcom, Ambarella and Allegro MicroSystems have P/S multiples of 23.52X, 8.94X and 6.16X, respectively.
Conclusion: Buy nLIGHT Stock Right Now
nLIGHT’s record A&D revenues, margin leverage, and discounted valuation make the stock a compelling investment option. Execution on HELSI-2, M-SHORAD, and laser sensing programs will be key to attaining 40% growth in A&D revenues this year. Moreover, sustaining margin improvements alongside revenue growth would support a stronger path to nLIGHT’s profitability, which presents a compelling buying opportunity for investors.
Currently, nLIGHT carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.