John Babcock, an analyst from Bank of America Securities, reiterated the Sell rating on Luminar Technologies (LAZR – Research Report). The associated price target was lowered to $4.50.
John Babcock has given his Sell rating due to a combination of factors impacting Luminar Technologies. Despite a better-than-expected fourth-quarter performance, driven by specific one-time benefits, the company’s overall financial outlook remains concerning. The anticipated revenue growth for 2025 is modest, and the projected shipment volumes are below previous forecasts, indicating potential challenges in scaling up production.
Additionally, Luminar Technologies is expected to continue experiencing significant cash usage, with a forecasted liquidity of $150 million by the end of 2025, which includes plans to raise $120 million through equity financing. The company is also projected to face ongoing gross losses, as production volumes are not yet sufficient to achieve a positive gross margin. These factors, combined with the need for substantial additional capital to reach self-funding status, contribute to the Sell rating, as the long-term growth trajectory appears slower than market expectations.