Luminar Technologies Inc. (NASDAQ: LAZR), has increased its sales by five times in the last four years.
Investors may not be satisfied with this, as the company’s revenue has fallen far short of the pace that its management had hoped for in 2020.
LAZR’s sales for the year ended at $70 million, compared to the $124 million forecasted.
Luminar stocks are currently down by more than 85% compared to the beginning of 2024.
The Luminar stock now faces stiff competition
Despite a massive drop in the shares of Luminar Technologies Inc., the risk for further downside is still present.
The company that makes lidar sense has a competitive advantage because it was the first to market in recent years.
It’s now facing stiffer competition from the likes Velodyne Cepton Innoviz etc.
LAZR may find it difficult to maintain, let alone increase, its gross margins in the future and, therefore, could remain unprofitable for a few more years.
Analysts now expect Luminar Technologies will take until 2027 before turning green in terms EBITDA.
The company originally expected to reach this milestone in 2024.
Plus, Luminar does not pay a regular dividend to make it more attractive for investors on the long term.
Luminar could be forced to dilute its investors
Luminar is a risky investment in the coming year, as its balance sheet had $661 million in liabilities at the end of its last reported quarter.
Comparatively, the Nasdaq-listed firm had only $199 millions in cash, including cash and cash equivalents, as well as marketable securities.
LAZR could be forced to dilute its shares to ensure that it has enough funds to continue operations.
Since its launch in late 2020, the company has increased its share count more than 50%.
Austin Russell, its chief executive, told investors last month that:
We’ve restructured Luminar further to withstand the near-term headwinds that the industry faces so we’re in a better position to capitalise long-term on this trillion-dollar market.
Note that Luminar’s shares once reached a high of more than $600.
LAZR’s director sold the company’s stock recently
Heng Jun Hong, a director of Luminar Technologies, reduced his stake in the firm earlier in December.
He sold 72,842 total shares for approximately $371,253.
Insider selling can be seen as a bad thing, as it could indicate that those who have the most information about the future prospects of the company are losing confidence.
LAZR has yet to prove it has a business that can scale successfully in the next few years.
If the company’s leadership does not reduce losses, Luminar shares could continue to fall in 2025.
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