For folks who bought the shares and held onto them during the past year, Luminar (NASDAQ:LAZR) has proved to be an excellent lidar (light detection and ranging) company to invest in. Now, it’s just a question of whether to take profits or stay the course with LAZR stock.
As I see it, there’s a prime opportunity to start a new position in the stock or even add to an existing one. If you’re going to pick out a lidar company to disrupt and lead the field in 2021 and beyond, Luminar is the one to bet on.
If there are any skeptics and doubters out there, perhaps a recent business update from the company ought to put your concerns to rest.
But then there’s another piece of the puzzle: is the stock trading at a fair price? With that in mind, let’s start off by analyzing the stock’s recent price action.
A Closer Look at LAZR Stock
After going sideways at the $10 level for a long time, LAZR stock came alive in November and December of last year.
During that exhilarating time, the share price basically went vertical. Astoundingly, it reached a 52-week high of $47.80 on Dec. 8, 2020.
The new year hasn’t been as generous to LAZR stockholders, however. February and early March of 2021 were particularly challenging, with the shares dropping below $20 on March 5.
On the other hand, the bulls seem to have regained control of the price trajectory in recent weeks. In fact, they even managed to keep the stock above $30 on March 22.
Therefore, if you can catch LAZR stock while it’s still in an uptrend, you might be able to ride a bull wave back to the prior high of nearly $50.
Executing in 2020
In a moment, we will examine Luminar’s strategy for lidar tech sector domination in 2021. First, though, it’s important to take stock of what the company achieved in 2020.
A recently released business update provides a compelling compendium of milestones. Moreover, InvestorPlace contributor Luke Lango provided a convenient summary of Luminar’s outstanding achievements.
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For one thing, Luminar completed the builds of its first Iris lidar units. Today, Iris outperforms Luminar’s Hydra lidar with “better-ranging performance and ability to see dark objects and even higher point density.”
Also in 2020, Luminar won a series production program for autonomy with Volvo Cars (OTCMKTS:VLVLY).
In addition, Luminar secured partnerships with Mobileye and Daimler Truck (OTCMKTS:DMLRY).
By the end of 2020, Luminar exceeded its order book target of $1 billion. More specifically, the company achieved its previously updated guidance of $1.3 billion.
That result, according to the company, could be attributed to “increased volume guidance from existing programs as well as new commercial deals.”
A Powerful Vision for 2021
The financial markets tend to be forward-looking. So, let’s see what Luminar’s predicting for the remainder of this year.
In 2021, Luminar plans to complete the testing process for key auto-grade specs for selected Iris lidar units, in preparation for series production.
Also this year, Luminar seeks to win at least three major commercial programs.
And regarding Luminar’s software segment, the company’s looking forward to “[c]ontinued Sentinel development leading up to alpha release at year end.”
On top of all that, Luminar, intends to grow its forward-looking order book by at least 40% in 2021.
Plus, Luminar expects to end the year with more cash than the company started it with (after factoring in the $154 million raised from warrants in 2021’s first quarter).
Finally, we should discuss Luminar’s financial guidance for 2021. Addressing that, Luminar projects that the company will generate revenues of $25 million to $30 million.
Note that in August of 2020, the forecast was $26 million in revenues for 2021. So, evidently the company remains confident and ambitious in this regard.
The Bottom Line
Lumiar’s ability to execute in 2020 is admirable. The company’s vision for 2021 should motivate the investors to stay on board.
As for LAZR stock, another run for the $50 area could happen sooner rather than later.
And even if you don’t time your entry perfectly, that’s fine. You can still profit in the long term as Luminar’s on track to lidar-market dominance.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. 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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