CONTRIBUTOR Trefis Team Trefis PUBLISHED JAN 29, 2021 3:11AM EST
Luminar Technologies (NASDAQ: LAZR), a company that specializes in lidar technology used in self-driving vehicles, has seen its stock rally by about 15% since early January. While there hasn’t been too much news specific to the company in recent weeks, the electric vehicle (EV) industry, which is leading the self-driving revolution, has seen a lot of buzz. For instance, there is increasing enthusiasm surrounding legacy automaker General Motors’ (NYSE:GM) EV plans, as the company formed a new business unit to sell electric vans and also saw Microsoft make an investment into Cruise, its autonomous-car division. Separately, Chinese e-commerce titan Alibaba unveiled an electric sedan under a new brand in collaboration with state-owned SAIC Motor. Apple is also rumored to be developing its own electric car, and there have been reports that it held meetings with EV startup Canoo (NASDAQ: GOEV) in this regard. Although none of these developments directly impact Luminar, the company is seen as a technology leader for lidar in mass-market vehicles and does stand to benefit as EVs and self-driving vehicles continue to gain traction. The stock also remains one of the few pure-play options in the self-driving market. See our analysis below of how Luminar compares to Velodyne, a company that has focused on lidar for lower volume applications.
[12/28/2020] Velodyne vs. Luminar: Which Is The Better Lidar Stock?
Velodyne Lidar (NASDAQ: VLDR) and Luminar Technologies (NASDAQ: LAZR), two companies that specialize in lidar technology, went public this year. Lidar – a laser-based technology, which essentially helps computers detect surrounding objects – is poised to grow meaningfully, driven by the broader adoption of self-driving cars, helping both companies. However, the two stocks are valued rather differently. While Luminar’s market cap stands at roughly $10 billion, trading at over 350x projected 2021 revenue, Velodyne – which is actually the more established player in the lidar market – is valued at under $4 billion, or a P/S multiple of about 25x. Let’s take a look at the two companies’ businesses to understand what’s driving the disparity in their valuation and which could be the better pick.