2023-03-22 08:49:53 ET
Goldman Sachs cut its rating on Luminar Technologies ( NASDAQ: LAZR ) to Sell from Neutral.
Analyst Mark Delaney said the ratings cut reflected margin risk for LAZR and the premium valuation. While the firm continues to see Luminar as one of the leaders in the very competitive lidar industry with recent design wins in the ADAS/AV ecosystem standing out, the near-term setup is called worrying.
"We see downside to the company's margin outlook with the company targeting revenue per vehicle of ~$1k which we believe implies ASPs roughly 50-100% higher than key competitors for MEMs/solid state lidar. While Luminar attributes this higher ASP in part to software, and we believe it has some opportunities in this regard, the market for ADAS/AV software is highly competitive and we believe both underlying hardware gross margins, and the tailwind from software, could be lower than the company targets (Luminar targets a long term non-GAAP EBIT margin of 35-40+%)."
In terms of valuation, Delaney noted Luminar is trading at ~4X the EV/2025 revenue estimate, which is rich in comparison to peers with meaningful customer traction.
Goldman Sachs assigned a price target of $5 to the LiDAR stock.
Shares of Luminar Technologies ( LAZR ) were down 7.76% in the premarket session on Wednesday to $7.11.
Read the latest breakdowns on Luminar Technologies ( LAZR ) from Seeking Alpha contributors.
For further details see:
Luminar Technologies slides 8% after Goldman Sachs turns bearish over near-term setup