Luminar Technologies cut at Goldman Sachs on margin headwinds

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Luminar Technologies cut at Goldman Sachs on margin headwinds
Credit: © Reuters.

By Sam Boughedda 

Goldman Sachs downgraded Luminar Technologies (NASDAQ: LAZR ) to Sell from Neutral with a price target of $5 per share in a note Wednesday.

GS analysts wrote that the cut was based on margin headwinds and the stock's premium valuation.

"We continue to see Luminar as one of a handful of leaders in the very competitive lidar industry (an industry that has numerous merchant lidar providers, and many AV companies also have in-house lidar technology), as evidenced by design wins with several companies in the ADAS/AV ecosystem," said the analysts.

However, the firm sees downside to the company's margin outlook, with it targeting revenue per vehicle of $1k, which they believe "implies ASPs roughly 50-100% higher than key competitors for MEMs/solid-state lidar."

"While Luminar attributes this higher ASP in part to software, and we believe it has some opportunities in this regard, the market for ADAS/AV software is highly competitive, and we believe both underlying hardware gross margins, and the tailwind from software, could be lower than the company targets," the analysts added. "Moreover, we believe that current valuation is expensive."

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