MicroVision vs. Luminar Technologies: Which Lidar Stock is a Better Buy?

NASDAQ: MVIS | MicroVision, Inc. News, Ratings, and Charts

MVIS – MicroVision (MVIS) and Luminar Technologies (LAZR) are two companies that are targeting the nascent but highly disruptive Lidar sector. The stocks of both these companies are trading at steep valuations, but one of them has more visibility than the other. So, let’s evaluate them both to see which is the better buy now. Read on.

Over the last 15 months, electric vehicle (EV) stocks have gained popularity. While the shift towards clean energy solutions is expected to gain pace over the coming decade, many EV companies, including Tesla, have been pumping in billions of dollars to develop self-driving technologies.

Even as  EV production is on the rise, investors should also brace for a similar explosion in the autonomous vehicle (AV) space driven by breakthroughs in artificial intelligence, automation, robotics, and light detection and ranging (or Lidar) tech. Here, we look at two such companies, MicroVision (MVIS) and Luminar Technologies (LAZR), that are positioning themselves to be long-term winners in the Lidar and AV driving space. But which of these two companies is the better investment bet now? Let’s look.

Lidar is a method for determining variable distance by targeting an object with a laser and measuring the time for the reflected light to return to the receiver.

Click here to checkout our Electric Vehicle Industry Report for 2021

MicroVision

MicroVision develops Lidar sensors used in automotive safety and autonomous driving applications. The company says  its laser beam scanning technology is based on micro-electrical mechanical systems, laser diodes, optomechanics, algorithms, and software. It also develops micro-display concepts for augmented reality headsets, and its consumer lidar tech is used in smart-home systems.

MVIS  is now valued at a market cap of $2.2 billion. In the first quarter, the company reported$0.5 million in sales, which were 67% lower year over year. It reported a $6.2 million net loss, or $0.04 per share, compared to a net loss of less than $5 million in the prior-year period. Analysts tracking the stock forecast the company to post revenue of $0.6 million and a loss of $0.03 per share in the quarter ending March 30.

In 2021, analysts expect  MVIS’ sales to rise by 34% year over year to $4.15 million, which means it’s trading at a forward price to sales multiple of more than 500x, which is astounding.

Luminar Technologies 

Luminar Technologies is a vehicle sensor and software company for passenger cars and commercial trucks. It has two business segments: Autonomy Solutions and Other Component Sales. The Autonomy Solutions segment designs, manufactures, and sells lidar sensors and related solutions for OEMs (original equipment manufacturers). The Other Component Sales segment is engaged in designing, testing, and consulting non-standard integrated circuits for government agencies and defense contractors.

In Q1 of 2021, LAZR reported sales of $5.3 million and a net loss of $0.08 per share. While it met consensus revenue estimates, Wall Street forecasts LAZR  will  post a $0.06 net loss  per share.

LAZR  confirmed it is on track to meet its 2021 revenue guidance $25 million – $30 million, compared to sales of less than $14 million in 2020. Further, the company ended the last year with a $1.3 billion  order book. Luminar expects its order book to grow by 40% and has expanded via partnerships to achieve this goal.

During its Q1 call, Luminar confirmed that it partnered with Fabrinet and Celestica to manufacture Iris sensors. And last month, it announced a partnership with aviation giant Airbus to explore the use of lidar tech.

Analysts expect Luminar to increase sales by 100% to $28 million in 2021 and by 36% to $38 million in 2022. So, it is trading at a 25x forward price to sales multiple, with a  market cap of $7.4 billion.

The verdict

MicroVision stock is down 48% from its 52-week high, while Luminar stock is also down 50% from record highs, making them attractive to contrarian investors. However, Luminar Technologies may be the better buy not just due to its lower valuation but also to its  healthy order book and recent partnerships. Conversely,  there is some  uncertainty surrounding MicroVision stock, especially after its steep decline in revenue in Q1.


MVIS shares fell $0.13 (-0.93%) in after-hours trading Friday. Year-to-date, MVIS has gained 160.97%, versus a 11.79% rise in the benchmark S&P 500 index during the same period.


About the Author: Aditya Raghunath


Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...


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