Automotive technology company Luminar Technologies, Inc. (LAZR) provides sensor technologies and software for passenger cars and commercial trucks in North America, the Asia Pacific, Europe, and the Middle East. It operates in two segments, Autonomy Solutions, and Components.

On September 22, 2022, research analysts at Northland Securities downgraded LAZR from an ‘outperform’ rating to a ‘market perform’ rating. Earlier, Goldman Sachs downgraded LAZR to a ‘neutral’ rating.

Over the past month, LAZR has lost 26.3% to close the last trading session at $7.00. It has lost 58.6% year-to-date and 53.3% over the past year. The stock is trading near its 52-week low of $5.61, which it hit on July 13, 2022.

Here is what could shape LAZR’s performance in the near term:

Weak Financials

For the second quarter that ended June 30, 2022, LAZR’s total revenue came in at $9.93 million, up 57.4% year-over-year. However, its Product-revenue came in at $1.80 million, down 9.1% year-over-year. Also, its gross loss came in at $18.16 million, up 1,076.2% year-over-year.

Moreover, its non-GAAP net loss came in at $65.03 million, up 134.7% year-over-year, while its non-GAAP loss per share came in at $0.18, up 125% year-over-year.

Stretched Valuations

LAZR’s forward EV/Sales of 60.64x is 5,763% higher than the industry average of 1.03x. Its forward Price/Sales of 60.10x is 7,559.2% higher than the industry average of 0.78x. Also, its trailing-12-month Price/Book of 29.58x is 1,453.9% higher than the industry average of 1.90x.

Negative Profit Margins

LAZR’s trailing-12-month gross profit margin of negative 103.04% is lower than the industry average of 36.42%. Its trailing-12-month ROCE, ROTC, and ROTA of negative 97.17%, 32.05%, and 39.82%, compared with the industry averages of 14.91%, 6.88%, and 5.12%, respectively.

POWR Ratings Reflect Bleak Prospects

LAZR has an overall F rating, equating to a Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

LAZR has an F grade for Value and Quality, consistent with its higher-than-industry valuation multiples and negative profitability margins. It also has an F grade for Stability, in sync with its 24-month beta of 1.87.

In the 65-stock Auto Parts industry, LAZR is ranked last.

Click here for the additional POWR Ratings for LAZR (Growth, Momentum, and Sentiment).

View all the top stocks in the Auto Parts industry here.

Bottom Line

LAZR’s losses widened in its last reported quarter. Moreover, analysts expect LAZR’s EPS to fall 100% year-over-year to negative $0.76 in 2022. Its EPS is estimated to decline by 92.6% per annum over the next five years. Given the stock’s stretched valuations and incapacitated fundamentals, I think LAZR might be best avoided now.

How Does Luminar Technologies, Inc. (LAZR) Stack Up Against its Peers?

While LAZR has an overall POWR Rating of F, one might consider looking at its industry peers, Ituran Location and Control Ltd. (ITRN), Modine Manufacturing Company (MOD), and LKQ Corporation (LKQ), which have an overall A (Strong Buy) rating, and Genuine Parts Company (GPC), which has an overall B (Buy) rating.

LAZR shares were trading at $6.68 per share on Tuesday morning, down $0.32 (-4.57%). Year-to-date, LAZR has declined -60.50%, versus a -23.49% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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