Stock Analysis & Ideas

Luminar: Mobileye Deal Is Just the Beginning, Says Top Analyst

Luminar Technologies (LAZR) stands at the forefront of two very 2020 trends. The company just went public yesterday (December 3) through a SPAC merger with Gores Metropoulos. Many companies have gone public via the “blank check” route this year and it has been particularly popular in the new vehicle technology space.

Which is the other 2020 hot trend Luminar is associated with. The lidar firm just recently inked a deal with Intel subsidiary Mobileye to provide its lidar for Mobileye’s 1st generation Robotaxi. The level 4 autonomous driverless fleet will be piloted in Tel Aviv, Dubai, Paris, and Daegu City.

The adoption of lidar represents a change of direction for Mobileye. The company has historically rejected laser-based lidar, preferring instead cameras and computer vision.

Northland analyst Gus Richard believes the Mobileye partnership sets Luminar up to be a “significant player long term.” The 5-star analyst expects lidar to have a “growing market opportunity as level 4 and level 5 autonomy is adopted in the late 2020s.” Richard estimates the automotive lidar market will be worth $2.5 billion by 2025.

What sets Luminar apart, according to Richard, is the fact that it is currently the only company that has lidar technology “that meets automotive requirements for hands-free highway driving.”

Moreover, Richard exclaimed “the train for 2025 models has left the station and Luminar looks like the only lidar company on board.”

However, the analyst also points out that on top of the lidar opportunity, Luminar has other tricks up its sleeve: “We believe that the value of Luminar is not only its current Lidar system and its roadmap to a $100 cost for an auto-grade lidar system it has developed but also its component capability in semiconductors and its perception software.”

The analyst added, “the company is developing a full-stack software capability or the ability for the automation system to make driving decisions. We believe that these are scarce resources makes LAZR a valuable asset to an automotive OEM.”

Accordingly, Richard rates Luminar shares an Outperform (i.e. Buy) (To watch Richard’s track record, click here)

Luminar appears to be flying under the Street’s radar right now and currently there are no other analysts reviewing the stock. It will be interesting to see if others come on board over the coming months. (See Luminar 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.

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