Velodyne Lidar: An Option for Apple’s Lidar Plans?

It is by now well-known that Apple (AAPL) is looking to get in on the EV (electric vehicle) action. The latest from the grapevine, according to Bloomberg, has the tech giant in talks with several lidar suppliers for its autonomous car plans. Production is slated to kick off by 2025, and a heavily customized lidar product appears to be one of the possibilities.

Could Velodyne Lidar (VLDR) be one of the options? Baird analyst Tristan Gerra has a list of criteria he believes Apple will be looking for.

Naturally, cost and performance are imperative, and so is the ability to deliver “high volumes.” There are other, more industry specific demands, that will come into play.

“We speculate solid-state FMCW or VCSEL+SPAD/MPPC technologies may be favored. FMCW technology offers several benefits including very long range, simple detector architecture, immunity to ambient noise and interference, and velocity measurement,” the 5-star analyst said. “VCSEL/hybrid SPAD (flash liDAR) technology offers the benefit of a very compact form factor, cost, and a simple architecture. Liquid crystal metasurface is another very promising, next-gen LiDAR technology.”

It is still early days for the fledgling industry, and the market is dynamic and competition intense. The fact Apple is looking to embrace lidar, gives VLDR a stamp of approval, says Gerra. Ultimately, the analyst believes the winners in the space will be the lidar companies “tied to the industry innovators,” such as Amazon, Apple, Tesla, and Mobileye.

The latter has already joined the fray and is developing next-generation FMCW LiDAR technology “in house for a planned ramp in 2025.” Gerra also thinks success will be rewarded to lidar companies “targeting broad-based LiDAR market applications outside of automotive.”

Whether Apple chooses Velodyne or not, the analyst evidently believes in the company’s potential. Gerra rates VLDR an Outperform (i.e. Buy) along with a $28 price target. The implication for investors? Upside of 47% from current levels. (To watch Gerra’s track record, click here)

The rest of the Street is just as effusive. With Buys only – 7, in total – the stock has a Strong Buy consensus rating. The projection is for ~54% upside over the next 12 months, given the average price target clocks in at $29.57. (See VLDR 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.