Luminar Technologies Inc (NASDAQ: LAZR) has managed to increase its sales by about five times over the past four years.
But that may still not be enough for investors as the company’s revenue growth has, nonetheless, fallen significantly short of the pace its management guided for in 2020.
LAZR ended last year with $70 million in sales versus up to $124 million it had forecast at the time.
Luminar stock is currently down more than 85% versus the start of 2024.
Luminar stock is now facing stiff competition
Despite a massive decline in shares of Luminar Technologies Inc, the risk of further downside remains on the table.
That’s because the company known for making lidar sense had an early entry advantage in recent years.
But it’s now facing stiff competition from the likes of Velodyne, Cepton, Innoviz etc.
So, LAZR could find it more difficult to sustain, let alone grow, its gross margins moving forward and could, therefore, remain unprofitable for another few years.
In fact, analysts now expect Luminar Technologies to take until 2027 to turn green in terms of EBITDA.
The company had originally expected to hit that milestone in 2024.
Plus, Luminar stock does not pay a dividend to appear any more attractive for long-term investors either.
Luminar may have to dilute its shareholders
Luminar remains a risky investment for the coming year as it had $661 million worth of liabilities on its balance sheet at end of its latest reported quarter.
In comparison, the Nasdaq listed firm had only $199 million in cash, including cash equivalents and marketable securities at the time.
So, LAZR may have to dilute its shareholders to make sure that it has sufficient funds to sustain operations.
The company has already increased its share count by more than 50% since its debut in late 2020.
Nonetheless, Austin Russell – its chief executive told investors last month:
We’ve further restructured Luminar to withstand near-term headwinds facing the industry so we’re better positioned to capitalise on the long-term value in this trillion-dollar industry.
Note that Luminar shares once traded at a high of over $600.
LAZR director recently sold company’s stock
Earlier in December, Heng Jun Hong – a Luminar Technologies director trimmed his stake in the company.
He sold a total of 72,842 shares for about $371,253.
Insider selling is typically seen as a negative as it may signal those with the most knowledge about the company’s future prospects are starting to lose confidence.
All in all, LAZR is yet to prove that it has a sustainable business that it can successfully scale in the coming years.
If the company’s management to narrow losses moving forward, Luminar stock could see further downside in 2025.
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