Earnings Update: Velodyne Lidar, Inc. (NASDAQ:VLDR) Just Reported And Analysts Are Trimming Their Forecasts

It's shaping up to be a tough period for Velodyne Lidar, Inc. (NASDAQ:VLDR), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Statutory earnings fell substantially short of expectations, with revenues of US$14m missing forecasts by 22%. Losses exploded, with a per-share loss of US$0.42 some 38% below prior forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Velodyne Lidar

Taking into account the latest results, the eight analysts covering Velodyne Lidar provided consensus estimates of US$79.5m revenue in 2021, which would reflect a small 2.2% decline on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 27% to US$1.00. Before this earnings announcement, the analysts had been modelling revenues of US$85.1m and losses of US$1.00 per share in 2021.

The analysts have cut their price target 11% to US$13.75per 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. There are some variant perceptions on Velodyne Lidar, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$9.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.3% by the end of 2021. This indicates a significant reduction from annual growth of 4.3% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% per year. It's pretty clear that Velodyne Lidar's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Velodyne Lidar's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Velodyne Lidar analysts - going out to 2023, and you can see them free on our platform here.

Even so, be aware that Velodyne Lidar is showing 3 warning signs in our investment analysis , you should know about...

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