With the usage of a high-intensity laser tool, a micro-electro-mechanical system (MEMS), and a GPS transceiver, light detection and ranging (LiDAR) technology creates a three-dimensional visual image. As a result, autonomous vehicles can collect data about a vehicle's surroundings, taking over from the driver.
The global LiDAR market is estimated to grow at a CAGR rate of 22.7% between 2019 and 2026, reaching $6.71 billion in the final year, driven by the rising need for Lidar from Unmanned aerial vehicles (UAVs) and autonomous vehicles. Consequently, companies from the given industry should benefit in the long term.
Today I’ll analyze and compare two lidar stocks, Luminar Technologies, Inc. (LAZR) and Innoviz Technologies Ltd. (INVZ), to see which one is a better addition to investors’ portfolios.
Founded in 2012, Luminar Technologies develops and sells lidar sensors and other software solutions related to autonomous vehicles. Innoviz is an Israel-based company that develops solid-state LiDAR sensor and perception software, supporting the mass production of autonomous cars.
Year-to-Date (YTD), LAZR stock decreased about 6.5%, outperforming its rival INVZ, which plunged around 36% over the same period.
Recent Developments
On January 20th, Luminar revealed its partnership with Mercedes-Benz. Under the terms of the deal, Luminar’s Iris LiDAR sensors are expected to speed up the development of autonomous technologies for Mercedes vehicles by enhancing vehicle safety and autonomous driving capabilities. This deal is a significant achievement for Luminar Technologies as it continues to advance towards series production. After the announcement, shares of Luminar spiked up about 13%.
Financial Overview & Analysts Estimates
Luminar Technologies last reported its earnings on Thursday, November 11th. For its fiscal third quarter, Luminar's overall revenue increased 89.1% on a year-over-year basis, coming in at $7.98 million. The revenue growth was due to the increase in sales from its Autonomy Solutions segment. However, the company slightly missed analysts consensus by $0.92 million.
Luminar's net loss grew 64% year-over-year to $51.34 million amid a 253% increase in total operating expenses, leading to Non-GAAP EPS of ($0.10), which stood in line with analysts’ consensus. Also, the company kept its full-year 2021 guidance, expecting to generate revenue in the range of between $30 and $33 million.
For the next quarter, analysts expect LAZR's bottom line to rise 11.57% year-over-year, standing at ($0.10) per share. Furthermore, Wall Street anticipates that its fourth-quarter revenue will advance 386.62% YoY to $11.83 million.
In the third fiscal quarter of 2021, Innoviz Technologies' revenue grew 13% year-over-year to $2.1 million, primarily driven by a 36% year-over-year increase in InnovizOne-related revenue. It is important to note that the company topped Wall Street revenue estimates by $0.1 million.
However, INVZ's net loss also advanced 68% YoY to $26.43 million in the third quarter, translating into lower-than-anticipated Non-GAAP EPS of ($0.20). Furthermore, the company strengthened its liquidity position by increasing its cash and short-term deposits to $324.57 million in Q3, up from $49.95 million as of December 31st, 2020.
Currently, Wall Street expects Innoviz's EPS to be ($0.19) in the fourth quarter of 2021. Besides, its Q4 revenue is estimated to come in at $3 million.
Comparing Options Market Sentiment
Looking at the February 18th, 2022 option chain for both LAZR and INVZ, we can figure out short-term options market sentiment by analyzing the calls/puts ratio. In LAZR's occasion, the open calls/open puts ratio at the $16.00 strike price comes in at 85x, implying a very strong bullish options market sentiment. When it comes to INVZ, the open calls/open puts ratio at the $5.00 strike price is 0.3x, showing a bearish options market sentiment.
The Bottom Line
I believe LAZR is currently a better pick than INVZ. It is worth mentioning that the company’s recently signed deal with Mercedes looks like a significant milestone, indicating a lot of potential benefits for both companies. Besides, Luminar Technologies has relatively better financials and forward growth rates. Finally, LAZR has a heavy bullish options market sentiment at the moment.
LAZR shares were trading at $15.58 per share on Monday morning, down $0.05 (-0.32%). Year-to-date, LAZR has declined -7.87%, versus a -7.35% 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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