Buying Opportunity • Feb 06
Now 26% undervalued Over the last 90 days, the stock is up 54%. The fair value is estimated to be US$1.77, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 26% over the last 3 years. Earnings per share has declined by 26%. For the next 3 years, revenue is forecast to grow by 39% per annum. Earnings is also forecast to grow by 38% per annum over the same time period. Annonce • Feb 02
Ouster and Velodyne Announce Combined Company Board of Directors in Anticipation of Closing of Merger of Equals Ernest Maddock served as Chief Financial Officer of Micron Technology, Inc. from 2015 until his retirement in 2018. Prior to that, he served as Executive Vice President and Chief Financial Officer of Riverbed Technology, Inc. from 2013 to 2015. From 1997 to 2013, Mr. Maddock served in various roles at Lam Research Corporation, culminating in the position of Chief Financial Officer from 2008 to 2013. Mr. Maddock has served on the boards of directors of Ultra Clean Holdings Inc. since June 2018, Avnet since August 2021 and Terdadyne since November 2022. Mr. Maddock previously served on the Board of Intersil Corporation from 2015 until its acquisition in 2017. Mr. Maddock received a BS in Industrial Management from the Georgia Institute of Technology and an MBA with a specialization in Finance from Georgia State University. Kristin Slaninahas served as a member of Velodyne Lidar’s board of directors since July 2021, and serves on Velodyne’s Audit Committee and Nominating and Corporate Governance Committee. Ms. Slanina is the Chief Innovation Officer at ParkMyFleet, a provider of parking locations and technology solutions for fleet operations, a position she has held since March 2021. Previously, she served as Chief Operating Officer of TrueCar, an automotive pricing and information website for new and used car buyers, from September 2020 to March 2021 where she led the newly formed solutions group and helped the company accelerate into its next phase of growth. Before TrueCar, she was Chief Transformation Officer of Thirdware Consulting, an IT consulting organization, from January 2019 to September 2020, where she led the Emerging Technology group and paved the way for Thirdware’s status as a Tier 1 partner with Ford and other OEMs on vehicle software development, machine learning and blockchain technology. Prior, Ms. Slanina has held roles of increasing responsibility at Ernst & Young, a global professional services firm, and Fiat Chrysler Automobiles, a manufacturer of automobiles, after spending the first 18 years of her career at Ford Motor Company, beginning as a powertrain engineer. Ms. Slanina has served on the Board of Comstock Inc. since May 2022. She holds an M.S. and a B.S. in Mechanical Engineering from Massachusetts Institute of Technology. Annonce • Jan 25
Velodyne Lidar, Inc. Announces Resignation of Michael Dee as Member of the Board On January 23, 2023, Michael Dee delivered notice to the board of directors of Velodyne Lidar, Inc. (the Company) of his resignation as a member of the Board, effective immediately. Mr. Dee had resigned as the Chairman and from all committees in July 2022. Mr. Dee has previously criticized the Board and management and voiced his concerns about his considerable differences of opinion with certain Board members and management. Recent Insider Transactions • Dec 26
CEO & Director recently sold US$125k worth of stock On the 22nd of December, Theodore Tewksbury sold around 159k shares on-market at roughly US$0.79 per share. This transaction amounted to 76% of their direct individual holding at the time of the trade. This was the largest sale by an insider in the last 3 months. Theodore has been a net seller over the last 12 months, reducing personal holdings by US$141k. Buying Opportunity • Dec 07
Now 24% undervalued after recent price drop Over the last 90 days, the stock is down 6.1%. The fair value is estimated to be US$1.41, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 26% over the last 3 years. Earnings per share has declined by 26%. For the next 3 years, revenue is forecast to grow by 43% per annum. Earnings is also forecast to grow by 38% per annum over the same time period. Major Estimate Revision • Nov 16
Consensus estimates of losses per share improve by 19% The consensus outlook for earnings per share (EPS) in 2022 has improved. 2022 revenue forecast increased from US$39.2m to US$40.1m. EPS estimate increased from -US$0.98 per share to -US$0.80 per share. Electronic industry in the US expected to see average net income growth of 9.8% next year. Consensus price target of US$1.85 unchanged from last update. Share price rose 34% to US$1.14 over the past week. Board Change • Nov 16
High number of new and inexperienced directors There are 7 new directors who have joined the board in the last 3 years. The company's board is composed of: 7 new directors. No experienced directors. No highly experienced directors. Independent Director Michael Dee is the most experienced director on the board, commencing their role in 2020. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Reported Earnings • Nov 10
Third quarter 2022 earnings: EPS exceeds analyst expectations Third quarter 2022 results: US$0.20 loss per share (improved from US$0.28 loss in 3Q 2021). Revenue: US$9.64m (down 26% from 3Q 2021). Net loss: US$41.6m (loss narrowed 24% from 3Q 2021). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 29%. Revenue is forecast to grow 45% p.a. on average during the next 3 years, compared to a 5.7% growth forecast for the Electronic industry in the US. Over the last 3 years on average, earnings per share has fallen by 26% per year but the company’s share price has fallen by 57% per year, which means it is performing significantly worse than earnings. Price Target Changed • Nov 03
Price target increased to US$4.43 Up from US$3.62, the current price target is an average from 6 analysts. New target price is 384% above last closing price of US$0.91. Stock is down 86% over the past year. The company is forecast to post a net loss per share of US$0.98 next year compared to a net loss per share of US$1.09 last year. Price Target Changed • Oct 12
Price target increased to US$4.04 Up from US$3.43, the current price target is an average from 6 analysts. New target price is 355% above last closing price of US$0.89. Stock is down 86% over the past year. The company is forecast to post a net loss per share of US$0.98 next year compared to a net loss per share of US$1.09 last year. Seeking Alpha • Sep 09
Velodyne Lidar: Not So Horrible Summary
Velodyne Lidar continues to report far better results than inherent in the $1 stock price.
The Lidar sensor supplier has a large order book with up to 40 multi-year agreements in place, but the company no longer provides the estimates.
The stock is too cheap with a market cap of only $250 million.
Velodyne Lidar (VLDR) has had a horrible couple of years or so since going public via a SPAC. The Lidar sensor company has changed the CEO and seen the founding shareholder unload his stock at prices below $1.50, yet the Lidar sensor business could still bloom. My investment thesis remains Bullish on the stock, but investors need high levels of risk tolerance to remain invested here.
Limited Projections
With Ted Tewksbury taking over the company at the end of last year, Velodyne Lidar quit providing financial projections of the business beyond the next quarter. The company regularly had high financial targets for a few years out and the current lack of details on customer agreements is a prime reason the stock is down to $1 with a market cap of only $250 million.
When the new CEO took over, Velodyne provided a list of 35 signed multi-year contracts and a pipeline with over 220 deals in the works. Mr. Tewksbury last said the company would start providing updated info by Q1'22 and the lack of such information is now hurting the stock despite clear progress with additional deals signed since the last disclosure for November 1. In addition, smaller industrial and robotic deals aren't always multi-year agreements making an order book comparison to automotive less meaningful.
The founding CEO selling his shares hasn't helped one bit. The market no longer has confidence in Velodyne Lidar despite the ongoing progression with additional business in the industrial and robotic segment along with under the radar work with autonomous vehicles and robotaxi providers.
For Q2, the company reported billings (adjusted revenues) of $12.5 million, up sequentially from $11.5 million in the prior quarter. Velodyne Lidar guided to Q3 revenues for $10 to $12 million with billings held back by ongoing supply chain issues.
On the Q2'22 earnings call, the CEO let this statement slip indicating a much stronger future than predicted by some mundane figures otherwise provided by the company:
Again, the strength is coming from industrial and robotics as well as the intelligent infrastructure with continuing contributions from AVs. And yes, let me just emphasize that we're going into Q3 with enormous demand and enormous backlog. And the only thing that's holding revenue growth back right now is supply. And as I explained earlier, we are well underway in redesigning our Pucks to use new FPGAs, which we expect to get us out of this company specific supply constrained by the end of the year.
While founder David Hall clearly isn't happy with Velodyne Lidar, the company still has an important position in the Lidar market with a huge customer backlog mostly unaltered from prior large projections. The company no longer announces the backlog figures, but the Lidar sensor firm clearly has a deal with Amazon (AMZN) and signed contracts with Baidu (BIDU) in the past.
Velodyne Lidar doesn't discuss the firms working with test Lidar sensors from the company, but half of the revenues from Q2 were related to the AV segment. The automotive segment is where companies such as Luminar Tech. (LAZR) and Innoviz Tech. (INVZ) report massive backlogs, yet Velodyne is selling vastly more amounts of sensors into those segments now.
After all, Innoviz Tech. only reported Q2 revenues of $1.8 million versus a backlog of $6+ billion. In essence, Velodyne Lidar reported over 3x the revenues of Innoviz from the automotive sector, yet Velodyne isn't viewed as a leader in the sector.
Even more intriguing is the concept of Velodyne Lidar producing the necessary costing Lidar sensor to supply the AV market at a price point below $500. Per the CEO on the Q2'22 earnings call:
With respect to passenger vehicles, as we've talked about in past calls, our discussions with OEMs and Tier 1's in the automotive industry and we've talked to all of them. The feedback has been loud and clear that prices have to come down below $500, preferably in the $300 to $400 range. And we have designs in progress right now that we expect to be ready for production when those markets materialize, which is probably still two or three years away.
A one million unit annual deal quickly becomes a $500 million sales opportunity and a backlog of $2+ billion based on typical deals over 4 to 5 years.
Big Market
The company continues to promote large gains in Lidar markets with the market size reaching $5.7 billion by 2026. A lot of the existing market isn't even controlled by the public Lidar companies where total revenues are only around $100 million while the total revenues are already approaching $3 billion now. Reported Earnings • Aug 09
Second quarter 2022 earnings: EPS exceeds analyst expectations Second quarter 2022 results: US$0.22 loss per share (up from US$0.41 loss in 2Q 2021). Revenue: US$11.5m (down 15% from 2Q 2021). Net loss: US$44.3m (loss narrowed 44% from 2Q 2021). Revenue was in line with analyst estimates. Earnings per share (EPS) surpassed analyst estimates by 25%. Over the next year, revenue is forecast to grow 19%, compared to a 10% growth forecast for the industry in the US. Recent Insider Transactions • Jun 11
Insider recently sold US$761k worth of stock On the 9th of June, David Hall sold around 500k shares on-market at roughly US$1.52 per share. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of US$107m more than they bought in the last 12 months. Major Estimate Revision • May 14
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast fell from US$60.7m to US$48.7m. EPS estimate unchanged from -US$1.05 per share at last update. Electronic industry in the US expected to see average net income growth of 13% next year. Consensus price target down from US$4.49 to US$3.50. Share price rose 2.8% to US$1.82 over the past week. Recent Insider Transactions • May 11
Independent Director recently bought US$65k worth of stock On the 10th of May, Virginia Boulet bought around 40k shares on-market at roughly US$1.63 per share. In the last 3 months, they made an even bigger purchase worth US$109k. Despite this recent purchase, insiders have collectively sold US$171m more in shares than they bought in the last 12 months. Reported Earnings • May 06
First quarter 2022 earnings: EPS and revenues miss analyst expectations First quarter 2022 results: US$0.25 loss per share (down from US$0.22 loss in 1Q 2021). Revenue: US$6.18m (down 65% from 1Q 2021). Net loss: US$49.1m (loss widened 20% from 1Q 2021). Revenue missed analyst estimates by 39%. Earnings per share (EPS) also missed analyst estimates by 2.7%. Over the next year, revenue is forecast to grow 47%, compared to a 11% growth forecast for the industry in the US. Board Change • Apr 27
High number of new and inexperienced directors There are 7 new directors who have joined the board in the last 3 years. The company's board is composed of: 7 new directors. 1 experienced director. No highly experienced directors. Chairman of the Board Michael Dee is the most experienced director on the board, commencing their role in 2020. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Major Estimate Revision • Apr 08
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast increased from US$50.5m to US$60.7m. EPS estimate unchanged from -US$0.95 at last update. Electronic industry in the US expected to see average net income growth of 12% next year. Consensus price target down from US$4.74 to US$4.49. Share price fell 13% to US$2.18 over the past week. Price Target Changed • Apr 06
Price target decreased to US$4.49 Down from US$4.99, the current price target is an average from 7 analysts. New target price is 93% above last closing price of US$2.32. Stock is down 83% over the past year. The company is forecast to post a net loss per share of US$0.95 next year compared to a net loss per share of US$1.09 last year. Recent Insider Transactions Derivative • Mar 13
Chief Product Officer exercised options and sold US$51k worth of stock On the 10th of March, Sinclair Vass exercised options to acquire 25k shares at no cost and sold these for an average price of US$2.06 per share. This trade did not impact their existing holding. Since March 2021, Sinclair's direct individual holding has increased from 236.00 shares to 4.97k. Company insiders have collectively sold US$153m more than they bought, via options and on-market transactions in the last 12 months. Major Estimate Revision • Mar 08
Consensus revenue estimates fall by 51% The consensus outlook for revenues in 2022 has deteriorated. 2022 revenue forecast decreased from US$103.9m to US$50.5m. Forecast losses increased from -US$0.87 to -US$0.95 per share. Electronic industry in the US expected to see average net income growth of 12% next year. Consensus price target down from US$7.38 to US$4.99. Share price fell 40% to US$2.20 over the past week. Recent Insider Transactions • Mar 06
Insider recently sold US$26m worth of stock On the 4th of March, David Hall sold around 10m shares on-market at roughly US$2.55 per share. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of US$105m more than they bought in the last 12 months. Reported Earnings • Mar 03
Full year 2021 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2021 results: US$1.09 loss per share (down from US$1.01 loss in FY 2020). Revenue: US$61.9m (down 35% from FY 2020). Net loss: US$212.2m (loss widened 42% from FY 2020). Revenue exceeded analyst estimates by 1.5%. Earnings per share (EPS) missed analyst estimates by 4.1%. Over the next year, revenue is expected to shrink by 22% compared to a 15% growth forecast for the industry in the US. Over the last 3 years on average, earnings per share has fallen by 42% per year but the company’s share price has only fallen by 29% per year, which means it has not declined as severely as earnings. Price Target Changed • Mar 02
Price target decreased to US$7.00 Down from US$7.88, the current price target is an average from 8 analysts. New target price is 95% above last closing price of US$3.59. Stock is down 78% over the past year. Price Target Changed • Jan 25
Price target decreased to US$7.88 Down from US$8.56, the current price target is an average from 8 analysts. New target price is 121% above last closing price of US$3.56. Stock is down 85% over the past year. The company is forecast to post a net loss per share of US$1.14 next year compared to a net loss per share of US$1.01 last year. Reported Earnings • Nov 07
Third quarter 2021 earnings released: US$0.28 loss per share (vs US$0.038 loss in 3Q 2020) The company reported a poor third quarter result with increased losses, weaker revenues and weaker control over costs. Third quarter 2021 results: Revenue: US$13.1m (down 59% from 3Q 2020). Net loss: US$54.7m (loss widened US$49.4m from 3Q 2020). Price Target Changed • Nov 06
Price target decreased to US$11.13 Down from US$12.63, the current price target is an average from 8 analysts. New target price is 75% above last closing price of US$6.35. Stock is down 54% over the past year. The company is forecast to post a net loss per share of US$1.00 next year compared to a net loss per share of US$1.01 last year. Recent Insider Transactions • Aug 14
Chief Technology Officer recently sold US$836k worth of stock On the 12th of August, Mathew Rekow sold around 106k shares on-market at roughly US$7.86 per share. In the last 3 months, there was an even bigger sale from another insider worth US$25m. Insiders have been net sellers, collectively disposing of US$79m more than they bought in the last 12 months. Reported Earnings • Aug 06
Second quarter 2021 earnings released: US$0.42 loss per share (vs US$0.28 loss in 2Q 2020) The company reported a poor second quarter result with increased losses, weaker revenues and weaker control over costs. Second quarter 2021 results: Revenue: US$13.6m (down 52% from 2Q 2020). Net loss: US$80.7m (loss widened US$71.0m from 2Q 2020). Recent Insider Transactions Derivative • Jul 20
President & CEO exercised options and sold US$277k worth of stock On the 15th of July, Anand Gopalan exercised options to acquire 30k shares at no cost and sold these for an average price of US$9.23 per share. This trade did not impact their existing holding. For the year to December 2020, Anand's total compensation was 2% salary and 98% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Anand now holds 383.78k shares directly in their own name. Company insiders have collectively sold US$79m more than they bought, via options and on-market transactions in the last 12 months. Executive Departure • Jun 15
Independent Director Barbara Samardzich has left the company On the 10th of June, Barbara Samardzich's tenure as Independent Director ended after 4.7 years in the role. As of March 2021, Barbara still personally held 102.82k shares (US$1.2m worth at the time). A total of 4 executives have left over the last 12 months. The current median tenure of the management team is 1.42 years, which is considered inexperienced in the Simply Wall St Risk Model. Recent Insider Transactions Derivative • Jun 14
President & CEO exercised options and sold US$131k worth of stock On the 10th of June, Anand Gopalan exercised options to acquire 12k shares at no cost and sold these for an average price of US$11.38 per share. This trade did not impact their existing holding. For the year to December 2020, Anand's total compensation was 2% salary and 98% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Anand now holds 372.37k shares directly in their own name. Company insiders have collectively sold US$79m more than they bought, via options and on-market transactions in the last 12 months. Recent Insider Transactions • May 29
Chief Strategy Officer recently sold US$25m worth of stock On the 25th of May, Joseph Jellen sold around 2m shares on-market at roughly US$10.25 per share. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of US$46m more than they bought in the last 12 months. Recent Insider Transactions • May 26
Chief Strategy Officer recently sold US$25m worth of stock On the 25th of May, Joseph Jellen sold around 2m shares on-market at roughly US$10.25 per share. This was the largest sale by an insider in the last 3 months. Insiders have been net sellers, collectively disposing of US$46m more than they bought in the last 12 months. Recent Insider Transactions • May 18
President recently sold US$4.3m worth of stock On the 13th of May, Anand Gopalan sold around 441k shares on-market at roughly US$9.85 per share. In the last 3 months, they made an even bigger sale worth US$8.4m. Anand has been a seller over the last 12 months, reducing personal holdings by US$13m. Major Estimate Revision • May 18
Consensus EPS estimates fall to -US$0.89 The consensus outlook for earnings per share (EPS) in 2021 has deteriorated. 2021 revenue forecast decreased from US$93.8m to US$85.7m. Losses expected to increase from -US$0.72 to -US$0.89. Electronic industry in the US expected to see average net income growth of 32% next year. Consensus price target down from US$19.44 to US$18.33. Share price fell 7.2% to US$10.56 over the past week. Recent Insider Transactions Derivative • May 16
President notifies of intention to sell stock Anand Gopalan intends to sell 441k shares in the next 90 days after lodging an Intent To Sell Form on the 13th of May. If the sale is conducted around the recent share price of US$10.25, it would amount to US$4.5m. For the year to December 2020, Anand's total compensation was 2% salary and 98% other compensation. This indicates that these sales could comprise a meaningful part of their income for the year. Anand now holds 745.67k shares directly in their own name. Company insiders have collectively sold US$14m more than they bought, via options and on-market transactions in the last 12 months. Breakeven Date Change • May 16
Forecast to breakeven in 2024 The 8 analysts covering Velodyne Lidar expect the company to break even for the first time. New consensus forecast suggests the company will make a profit of US$9.93m in 2024. Average annual earnings growth of 53% is required to achieve expected profit on schedule. Reported Earnings • May 12
First quarter 2021 earnings released: US$0.22 loss per share (vs US$0.68 loss in 1Q 2020) The company reported a soft first quarter result with increased losses and weaker control over costs, although revenues improved. First quarter 2021 results: Revenue: US$17.7m (up 4.1% from 1Q 2020). Net loss: US$40.8m (loss widened 75% from 1Q 2020).