Luminar Technologies, Inc. (NASDAQ:LAZR) Just Reported And Analysts Have Been Cutting Their Estimates

There's been a major selloff in Luminar Technologies, Inc. (NASDAQ:LAZR) shares in the week since it released its second-quarter report, with the stock down 38% to US$0.93. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Luminar Technologies

Taking into account the latest results, the current consensus, from the ten analysts covering Luminar Technologies, is for revenues of US$74.5m in 2024. This implies a noticeable 2.6% reduction in Luminar Technologies' revenue over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to US$1.10. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$107.1m and losses of US$1.10 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to next year's revenue estimates, while at the same time holding losses per share steady.

The analysts have cut their price target 7.4% to US$4.27per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation. 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. Currently, the most bullish analyst values Luminar Technologies at US$9.00 per share, while the most bearish prices it at US$1.00. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.1% by the end of 2024. This indicates a significant reduction from annual growth of 42% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.7% per year. It's pretty clear that Luminar Technologies' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Luminar Technologies' future valuation.

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. At Simply Wall St, we have a full range of analyst estimates for Luminar Technologies going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Luminar Technologies has 5 warning signs (and 3 which don't sit too well with us) we think you should know about.

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.