![]() ![]() I reckon LAZR would be able to gain 10% of the market share but would be forced to reduce its pricing per unit to around $750. The market of Lidar is already very competitive with various start-ups as well as established Tier 1 suppliers entering the field. I further assumed that Lidar and competing Radar technology will each take half of this market share and each vehicle equipped with Lidar would only require 1 sensor. I based this on the recent share of luxury vehicles being in the 15%-18% range of total vehicle sales. I assumed 20% of these new vehicles would be candidates for advanced driver assistance systems (ADAS) and/or Level 3+ autonomous driving technology. From a market size perspective, the total worldwide automotive market (passenger and commercial vehicles) is expected to grow to about 155MM units by 2030 at a CAGR of 3.7%. Luminar Day 2023 Presentation Valuation shows a worthless stock…Īs with any young growth company, to value Luminar Technologies, Inc., I had to make assumptions about the viability of its business model, its terminal revenue and operating margins. While it is fathomable that the production costs are going to decrease radically with automated series production in Mexico and Asia, and its opex costs as a % of revenue are going to decline significantly, I do not see them commanding such premium margins in the auto industry (more on this later). This also seems way too optimistic given the average auto parts industry margins of just over 5% (with R&D being expensed). This equates to GAAP operating margins of 25%-35%. Luminar further projects it can achieve 35%-40% operating margins on a non-GAAP basis by FY2030. This would mean its sensors being installed in 3.2% of all vehicles produced worldwide an extremely tall order. I find these projections to be way too optimistic given the entire automotive industry is estimated to produce about 155MM vehicles in 2030. Looking out further, Luminar expects its order book to grow to >$5B with 5MM+ vehicles being installed with its sensors by 2030. Furthermore, automotive development cycles are quite variable and production timelines delays are not uncommon. However, one has to bear in mind that the order book includes estimates of production volumes and price points for Luminar's hardware and software where the customer has not made contractual commitments. Their order book has grown nicely from $1.3B in 2020 to $3.4B now, and the management is targeting to add another $1B to it by the end of this year. Its projections are for 100% annualized growth for the next 5 years. As presented in the recently held 1st Luminar Day, the company is expecting huge top line growth. ( NASDAQ: LAZR) is about to embark on serial production of its Lidar devices. ![]() Ethan Miller Huge growth ahead, but path to profitability is tough… ![]()
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