With the goal of providing a high-resolution 3D view of their environment, LiDAR (light detection and range) sensors are set to become a mainstay in autonomous vehicles.
While not all are tech advocates — Elon Musk, for one, has previously stated that he’s not a fan — JP Morgan analyst Samik Chatterjee said “the fight is on.” The debate around increasing the value of a LiDAR in a sensor has long been settled”.
The decision to forgo the use of lidar was mainly around cost rather than performance, although the jury is still out in favor of a “winning technology approach”.
That said, as far as Chatterjee is concerned, the answer is pretty obvious.
“We believe the real difference remains in high performance in the face of LiDAR capable of handling both ADAS L2 as well as autonomy on the L3+ motorway allowing automakers to prioritize safe with ADAS while selling a premium option when driving on the L3 motorway,” emphasized the analyst.
Against this backdrop, Chatterjee chose this topic and went with it to come to a logical conclusion: triggering LiDAR stock, which he considers a future winner. In fact, the analyst sees a particular pair of stocks that are delivering over 200% gains over the next year.
And it turns out he’s not alone; use TipRanks database, we can see that both are rated as Strong Buy by analyst consensus. Let’s take a closer look.
Luminar Technology (LAZR)
We’ll start with Luminar, one of the first lidar companies to go public in December 2020, following SPAC’s merger with Gores Metropoulos. The company has established itself as a leader in this nascent field with a focus on bringing to market mass-produced automotive-grade products without breaking the bank. This technology is designed with broad scope in mind, suitable for both passenger cars and commercial trucks.
The company has shifted from its legacy Hydra system to the more capable Iris, and the auto industry has clearly been impressed. Luminar has contracted with various OEMs including lighting brands such as Nissan, Volvo and Mercedes.
Interest from the industry was reflected in expanded revenue, as outlined in the latest set of quarterly results for Q2 2012. Revenue came in at $10 million, up 57% year-on-year. and exceeded the city’s $8.52 million forecast. Not much of a profit success, with EPS of -$0.27, well below the -$0.24 expected by analysts.
However, the company raised its full-year 2022 revenue outlook from $40 million to $40 million to $45 million. Consensus is seeking $41.35 million.
J.P. Morgan’s Chatterjee thinks there is more growth in the tokens, believing the company is positioned “not only as an industry leader in regards to LiDAR technology, but more broadly in regards to technology autonomous driving technology”.
“We forecast Luminar to end the decade with the highest revenue among its peers, and the company has plenty of leverage to match the consensus and implicit target of $4.5 billion, and $5 billion, respectively, by 2030,” added Chatterjee. “Luminar has the largest number of wins for an independent LiDAR company, including both traditional and non-traditional OEMs, and has a strong revenue outlook around software with investments in software repositories with Zensact, driving revenue opportunities for the company is relatively much larger than for other companies that focus solely on hardware differentiation. “
To this end, Chatterjee thinks LAZR has some way to go and in a way, we mean a 282% increase. Those are the returns investors are looking at, if the stock hits the top $30 price target on Chatterjee Street. Needless to say, the analyst rating is Overweight (i.e. Buy). (To see Chatterjee’s achievements, click here)
Overall, with 9 recent analyst reviews recorded, including 7 Buys and 2 Holds, LAZR earned a Strong Buy analyst consensus rating. The stock is selling for $7.86 and their average price target of $16.78 implies a rally of up to 113% over the next 12 months. (View Luminar stock forecast on TipRanks)
Innoviz Technology (INVZ)
The next JPMorgan pick we’re looking at is Innoviz Technologies. The company currently has two LiDAR hardware systems available, the first generation InnovizOne and the second generation InnovizTwo. These products have been tested and used in a wide range of applications and driving conditions, including robotics, technology drones, industrial drones, and sidewalk consumer vehicles. , as well as heavy trucks, industrial equipment and commercial drones. Both systems are compatible with Level 3-5 autonomous vehicles. Innoviz’s LiDAR system can be complemented by the company’s Perceptions software package.
The company’s next major product, the ‘next generation’ Innoviz360, is being last developed for both automotive and non-automotive applications. It is scheduled to go to market in the fourth quarter of this year.
For companies trying to break into a new niche, having the biggest wigs in the industry is paramount. This is what Innoviz has proved to be adept at. Innoviz was the first company to win the L3 LiDAR design win with BMW, and that was followed recently with the news that Volkswagen’s CARIAD arm has selected the company as the LiDAR sensor and software supplier for the company. all Volkswagen branded AV equipment. This was a huge profit and was the factor driving future orders from $2.6 billion to $6.6 billion.
Still, it’s still early days for the company on the revenue front, with sales coming in at just $1.79 million in Q2 of 22. However, that number has grown to 77.2% compared to the same period last year.
Although Chatterjee thinks the company only has a “limited portfolio of hardware products,” he emphasizes the fact that Innoviz is setting up “the largest order book of any purely public LiDAR company at this time.” “.
“In addition,” the analyst continued, “in addition to the opportunity to expand with Volkswagen with more brands and more registered models to take advantage of the platform set up by CARIAD, we also expect a faster pace of competition. wins with customers accelerated after confirmation by two major automotive OEMs. We expect the combination of multiple wins, high volumes, a balance between LiDAR cost and performance, and the ability to support highway autonomy at high speeds will help Innoviz grow revenue well by the end of the decade. century, while cost discipline drives profits. “
Therefore, Chatterjee rates Overweight (i.e. Buy) on Innoviz stock with a $22 price target. If that number is met, investors will receive a huge return of 316% a year from now.
Do other analysts agree with Chatterjee? That’s how is it. With 100% Street support, or 4 Buy ratings to be exact, the message is clear: INVZ is a Strong Buy. At $8.67, the median price target puts upside potential at ~64%. (View Innoviz’s stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important to do your own analysis before making any investments.