Luminar Technologies (LAZR) has made quite a splash since going public via a SPAC merger just over a month ago. With its potential to play a meaningful part in the increasing adoption of autonomous vehicles, the lidar maker is drawing plenty of attention.
Recently, Deutsche Bank analyst Emmanuel Rosner hosted a virtual investors meeting with the company’s Head of Technology Strategy Matthew Weed and VP of IR Michael Beer. The analyst shared some key takeaways from the chat.
First off, Luminar believes its products can provide excellent performance at an “optimal price.” The company says its LiDAR architecture is “designed to maximize both range and resolution.”
Luminar’s system uses 1550nm wavelength which can see further ahead without resolution degradation, while traditional 905nm wavelength lidar systems cannot apply as much power due to eye safety limitations. Luminar achieves this feat by using its proprietary InGaAs receiver (gallium arsenide.)
“Normally,” Rosner explained, “Gallium arsenide is very expensive ($10k per wafer) but LAZR has devised a custom method (protected by patents) that only requires ~1/10000th of a wafer to deliver the necessary performance in the receiver. As a result, its cost per receiver already is in the single-digit dollar range.”
What’s more, while the leading components (ASIC, receiver, laser) are custom made for the 1550nm wavelength mean the BoM (bill of materials) will at first be high, over time these should be significantly reduced as the company “builds economies of scale.”
By the time the Volvo serial production kicks off in 2022, Luminar is certain it can reach $500 BoM per unit and, longer term, expects BoM to be sub-$100.
As far as the order book is concerned, the company says it currently has $1.3 billion’s worth of orders, based on the four production contracts it has signed so far (Volvo, Daimler Truck, Mobileye, and unnamed OEM). By the middle of the decade, Luminar expects the order book to swiftly increase to the $10 billion ballpark.
The company expects roughly 11 new automotive series production contracts to be given to LiDAR suppliers over the next two years and anticipates “to win a solid share of them.”
All of this prompted Rosner to keep a Buy rating and $37 price target on the stock. This target implies ~18% upside from current levels. (To watch Rosner’s track record, click here)
Wall Street is on the same page. LAZR received 3 Buy ratings vs 1 Hold over the last three months. Meanwhile. shares are selling for $31.46 and their $17 average price target matches Rosner’s above. (See LAZR stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
