Yahoo Finance Earnings Release: Here's Why Analysts Cut Their Luminar Technologies, Inc. (NASDAQ:LAZR) Price Target To US$4.90
Luminar Technologies, Inc. (NASDAQ:LAZR) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The results look positive overall; while revenues of US$21m were in line with analyst predictions, statutory losses were 3.2% smaller than expected, with Luminar Technologies losing US$0.30 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Luminar Technologies
Following the latest results, Luminar Technologies' eleven analysts are now forecasting revenues of US$107.9m in 2024. This would be a huge 42% improvement in revenue compared to the last 12 months. Losses are forecast to narrow 6.6% to US$1.15 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$114.9m and losses of US$1.23 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers fell somewhat.
The analysts have cut their price target 7.5% to US$4.90per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Luminar Technologies at US$9.00 per share, while the most bearish prices it at US$1.20. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Luminar Technologies' growth to accelerate, with the forecast 59% annualised growth to the end of 2024 ranking favourably alongside historical growth of 45% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Luminar Technologies to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Luminar Technologies' future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Luminar Technologies going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 5 warning signs for Luminar Technologies you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
