Light detection and ranging (LiDAR) technology creates a three-dimensional visual image, utilizing a high-intensity laser tool, micro-electro-mechanical system (MEMS), and GPS transceiver. This game-changing technology is expected to face strong demand across different industries, including automotive, healthcare, aerospace & defense, IT, and others.
Fortune Business Insights report shows that the global LiDAR market should grow at a CAGR of 22.7% between 2019 and 2026, reaching $6.71 billion in the terminal year, driven by the increasing demand for Lidar from Unmanned aerial vehicles (UAVs) and autonomous vehicles.
With this in mind, I intend to analyze and compare two LiDAR stocks, Luminar Technologies, Inc. (LAZR) and MicroVision, Inc. (MVIS), to determine which company presents a better buying opportunity at current levels.
Founded in 2012, Luminar Technologies develops and sells lidar sensors and other software solutions related to autonomous vehicles. Headquartered in Redmond, Washington, MicroVision is a laser technology company that concentrates on developing lidar sensors used in automotive safety and autonomous driving applications.
Year-To-Date (YTD), LAZR has dropped about 43%, underperforming its rival MVIS, which lost 22.3% over the same period.
Recent Developments
On May 25th, Luminar announced that it had strengthened its leadership, hiring former top tech and auto industry executives. With that, Luminar hired CJ Moore, who had previously worked for such well-known companies as Tesla and Apple, to lead the company's software team, developing autonomous safety features integrated with Luminar's lidar. Luminar also hired other prominent candidates. This move was welcomed by investors, who pushed Luminar shares up over 4% after the announcement.
Financial Overview & Analysts’ Estimates
On May 5th, Luminar Technologies revealed its first-quarter earnings report. In Q1, the company’s revenue increased by 29.2% year-over-year to $6.86 million amid increased sales from its Autonomy Solutions segment, driven by higher revenue from customization / non-recurring engineering services and an increase in sales of sensors. However, Luminar missed Wall Street's revenue consensus by $1.5 million.
The company's net loss advanced 16% year-over-year to $88.33 million, leading to a Non-GAAP EPS of ($0.16), which was below the analysts' estimates of ($0.13). Notably, Luminar ended the quarter with $706.9 million of cash on hand, with a cash burn rate of $32.84 million in Q1. Besides, Luminar Technologies kept its FY2022 guidance unchanged, planning to generate $40 million in revenues.
For the second quarter, Wall Street analysts anticipate LAZR's EPS to decrease 105.08% year-over-year to ($0.16). However, the company's top line should lift 39.23% YoY to $8.78 million in the current quarter.
MicroVision last issued its earnings report on April 27th. The company’s first-quarter revenue decreased 30.0% on a year-over-year basis, standing at $0.35 million. This decrease was due to the lower license and royalty revenues under its PicoP scanning technology agreement. Not surprisingly, Microvision missed the revenue consensus by $0.35 million. Its Q1 GAAP EPS has been reported at ($0.08), missing estimates by $0.02.
MVIS' Adjusted EBITDA loss came in at ($9.0 million), compared to a year-ago value of ($4.3 million). The company finished the quarter with $103.3 million in cash, cash equivalents, and short-term investment securities, but its first-quarter cash burn rate increased 142% YoY to $10.9 million. However, MVIS' liquidity position looks convincing, with no need for capital raising in the near term.
Currently, Wall Street expects MicroVision's EPS to grow 22.22% YoY to ($0.07) in the second quarter of 2022. But, its FQ2 revenue is estimated to drop 6.17% YoY to $0.7 million.
Bullish Options Bets On LAZR Stock
During the June 6th trading session, there was a purchase of about 27,759 $11.50 June 17th, 2022, call options for $0.17 per contract. Moreover, this transaction brings the total number of open contracts to 30,962 (source: barchart.com). A buyer of those calls needs Luminar stock to rise to $11.67 by the expiration date to break even. That’s an upside potential of about 21% from Luminar's current price.
The Bottom Line
While Luminar Technologies and MicroVision should capitalize on the LiDAR industry’s growth in the long term, I believe Luminar is presently a better pick based on its superior financials, recent strategic appointments, promising forward growth rates, and bullish options market sentiment, backed by bullish bets from the options traders.
LAZR shares fell $0.09 (-0.93%) in premarket trading Wednesday. Year-to-date, LAZR has declined -43.70%, versus a -12.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Oleksandr Pylypenko
Oleksandr Pylypenko has more than 5 years of experience as an investment analyst and financial journalist. He has previously been a contributing writer for Seeking Alpha, Talks Market, and Market Realist.
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