Velodyne Misses 4Q Sales Outlook; Shares Drop 7%

Shares of Velodyne Lidar sank 7.3% on Friday after the producer of lidar sensors reported lower-than-expected preliminary results for the fourth quarter and full-year 2020. Velodyne is scheduled to report its fourth-quarter results on Feb. 25.

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Velodyne (VLDR) expects to generate 4Q revenue in the range of $15.5 – $16 million, which is far below the Street’s projections of $27.3 million. As for the full year, the company forecasted to post revenue of $94 million, compared to the Street consensus of $100.9 million and its previous guidance of about $101 million.

Velodyne said that it shipped over 4,100 sensors to its global customer base in 4Q, and more than 11,500 units in 2020. Further, the company’s project pipeline increased to 183 in 4Q compared to 175 at the end of 3Q.

Velodyne, citing “reduced near-term visibility,” withdrew its 2021 guidance. However, the company remains optimistic about its long-term prospects. (See VLDR stock analysis on TipRanks)

Despite the weak preliminary results, Oppenheimer analyst Colin Rusch maintained a Buy rating on the stock with a price target of $21 (12.3% downside potential). The analyst said, “We note the company made substantial progress in ramping shipments of its solid-state Vellaray product and hit its GM [gross margin] and operating income metrics despite lower revenue.”

Rusch added, “COVID-19 issues aside, we believe the company is executing well especially given the early stage of its product ramp and substantial lead over competitors in commercialization.”

From the rest of the Street, the stock scores a bullish outlook with a Strong Buy analyst consensus based on 6 unanimous Buys. The average analyst price target of $28.20 implies upside potential of about 17.8% to current levels. Shares have gained 28.1% since the stock was listed on the NASDAQ on Sept. 30, 2020.