One of the biggest stories of last week was how Luminar Technologies, Inc. (NASDAQ:LAZR) shares plunged 47% in the week since its latest second-quarter results, closing yesterday at US$0.88. It looks like a moderately negative result overall with revenues falling 19% short of analyst estimates at US$16m. Statutory losses were US$0.29 per share, roughly in line with what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Luminar Technologies' eight analysts are now forecasting revenues of US$103.9m in 2024. This would be a sizeable 36% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.15. Before this latest report, the consensus had been expecting revenues of US$107.1m and US$1.10 per share in losses. Overall it looks as though the analysts are negative in this update. Although revenue forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.
There was no major change to the consensus price target of US$4.52, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Luminar Technologies, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$1.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Luminar Technologies' growth to accelerate, with the forecast 85% annualised growth to the end of 2024 ranking favourably alongside historical growth of 42% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Luminar Technologies is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Luminar Technologies' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Luminar Technologies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Luminar Technologies analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 5 warning signs for Luminar Technologies (3 shouldn't be ignored!) that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.