Luminar Stock Analysis: The Low-Cost Ticket to the Self-Driving Revolution

  • Luminar Technologies (LAZR) has imperfect but improving financials.
  • Furthermore, Luminar Technologies is reducing its workforce and claims to have Tesla as a major customer.
  • Investors should consider buying a few shares of Luminar Technologies stock.
Luminar Technologies stock - Luminar Stock Analysis: The Low-Cost Ticket to the Self-Driving Revolution

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How can you achieve direct exposure to self-driving technology at a lost cost? The first step is to conduct your due diligence on Luminar Technologies (NASDAQ:LAZR). Luminar Technologies is improving, which is important. Luminar Technologies stock is currently undervalued and should not be overlooked.

Just to recap, Luminar Technologies specializes in lidar, which is short for light detection and ranging technology. As Reuters explained, lidar uses sensors to create “a three-dimensional map of the road” to assist self-driving vehicle systems.

If you’re like me, then you can envision lidar sensors being standard equipment in a wide variety of vehicles in the coming years.

To get ahead of this trend, investors can buy a few shares of Luminar Technologies stock now. Just don’t go overboard, as this is a high-risk and potentially high-reward industry, company and stock.

Luminar Technologies Stock Falls but the Business Improves

I won’t claim that all cheap stocks are worth your investable capital. However, Luminar Technologies shares have lost more than 90% of their value since early 2021. This stock-price rout seems overdone, so there could be a terrific buy-and-hold opportunity for lidar lovers.

Granted, Luminar isn’t currently profitable, so you’ll be disappointed if you’re expecting perfection. Improvement is the name of the game, however, and Luminar Technologies appears to be making strides.

In 2024’s first quarter, Luminar Technologies generated $20.97 million in revenue, up 45% year over year. Luminar’s quarterly net earnings loss narrowed by 14% YOY to $125.7 million.

On an adjusted basis, Luminar Technologies lost 19 cents per share in Q1 of 2024. That result is better than the company’s loss of 24 cents per share in the year-earlier period, and it also beat the analysts’ consensus call for a loss of 22 cents per share.

Job Cuts (Definitely) and a Famous Customer (Possibly)

In other news, as part of a restructuring strategy, Luminar Technologies plans to reduce its workforce by approximately 20%. The layoffs should affect around 140 of Luminar’s employees.

Luminar Technologies CEO Austin Russell emphasized that this cost-cutting measure doesn’t mean the company is in trouble.

The “core” of Luminar’s “business has never been stronger,” Russell insisted. Hopefully, the company’s upcoming quarterly reports will prove the CEO to be right about that.

Finally, I must mention that, according to Reuters, Luminar Technologies claimed that Tesla (NASDAQ:TSLA) “was the largest customer for its sensors in the first quarter” of 2024. That’s encouraging news, if it’s true, since Tesla is a behemoth in the automotive space.

I can’t verify whether Luminar’s claim is actually true, though. Apparently, Luminar Technologies stated that Tesla accounted for over 10% of Luminar’s first-quarter revenue. But then, Reuters stated, “Tesla’s electric vehicles that are sold do not use lidars and it is not clear where Tesla used the sensors.”

Moreover, Tesla CEO Elon Musk declared in 2019, “Lidar is a fools’ errand. And anyone relying on Lidar is doomed.” In any case, this is an ongoing news story and I certainly plan to keep tabs on any further developments.

Luminar Technologies Stock: Stay Small and Laser-Focused

Undoubtedly, there are risks associated with an unprofitable startup like Luminar Technologies. Consequently, Luminar’s investors should stay small in their position sizes and also remain laser-focused with their research and due diligence.

That said, I’m encouraged by the improvement in Luminar Technologies’s quarterly results. Time will tell whether the company’s cost-cutting measures will result in further financial improvement.

As for Luminar’s claim about Tesla being a major customer, we’ll all just have to keep tabs on this ongoing news story. For now, however, Luminar Technologies stock is a ridiculously cheap, high-conviction bet on the growth of the lidar market.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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