Automotive technology company Luminar Technologies, Inc. (LAZR) provides sensor technologies and software for passenger cars and commercial trucks. The company operates through its two broad segments of Autonomy Solutions and Components.

For the fiscal second quarter, the company reported total revenue of $9.93 million, representing a 57.4% increase from its year-ago value and a positive surprise of 17.6% compared to the consensus estimate. Moreover, LAZR raised its full-year 2022 revenue outlook to $40-$45 million, up from the $40 million guided earlier. The company also raised guidance for the year-over-year growth of its order book from 40% to 60%.

The stock has declined 58.7% year-to-date and 46.8% over the past six months. Moreover, it has declined 26.7% over the past month to close its last trading session at $6.99. LAZR is trading lower than its 50-day moving average of $8.53 and 200-Day moving average of $10.77, indicating a downtrend.

Weak Bottom Line

For the fiscal second quarter ended June 30, LAZR’s non-GAAP gross loss widened significantly year-over-year to $10.91 million. Non-GAAP net loss and non-GAAP net loss per share came in at $65.03 million and $0.18, worsening 134.7% and 125% from the prior-year period, respectively.

Poor Profitability

LAZR’s trailing-12-month gross profit margin of a negative 103.04% compares to the industry average of 36.42%. Its trailing-12-month ROE, ROTC, and ROA of a negative 97.17%, 32.05%, and 39.82% compare to their respective industry averages of 14.91%, 6.79%, and 5.14%.

Analysts Expect Bottom-line Declines

The consensus EPS estimates of a negative $0.20 and a negative $0.21 for the quarters ended September and ending December 2022 indicate 100.7% and 78.7% year-over-year declines, respectively. Moreover, Street EPS estimate for fiscal 2022 of a negative $0.76 reflects a worsening of 98.8% from the previous year.

POWR Ratings Reflect Bleak Prospects

LAZR’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. LAZR has a Quality grade of F, in sync with its bleak profit margins. The stock also has a D grade for Growth and Sentiment, consistent with its widening losses expected by analysts.

In the 65-stock Auto Parts industry, it is ranked last.

Click here to see the additional POWR Ratings for LAZR (Value, Momentum, and Stability).

View all the top stocks in the Auto Parts industry here.

Bottom Line

Although the company has raised its topline guidance, its widening losses are concerning. With expectations of a negative EPS this year and the stock’s consistent downtrend, LAZR might be best avoided now.

How Does Luminar Technologies, Inc. (LAZR) Stack Up Against its Peers?

While LAZR has an overall POWR Rating of F, one might consider looking at its industry peers, Ituran Location and Control Ltd. (ITRN) and Modine Manufacturing Company (MOD), which have an overall A (Strong Buy) rating, and Genuine Parts Company (GPC) and Gates Industrial Corporation plc (GTES), which have an overall B (Buy) rating.

LAZR shares fell $0.01 (-0.14%) in premarket trading Friday. Year-to-date, LAZR has declined -58.72%, versus a -22.77% rise in the benchmark S&P 500 index during the same period.

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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