4 Lidar Stocks to Add to Your Portfolio
Lidar is undoubtedly one of the most interesting technological developments of the 21st century. This technology, which is a shorthand for “light detection and ranging,” allows computerized systems to develop 3D landscape models. This method allows them to measure variable distances, making lidar stocks desirable among investors.
It also allows the system to generate data about the shape of the earth and objects on its surface. With this in mind, it’s easy to see how the primary application of most lidar systems is self-driving technology.
However, lidar has uses well beyond self-driving technology, such as for land mapping, meteorology and even astronomy. Having such broad-ranging applications is a strong sign for investors; here are the best lidar stocks to buy:
- Aeva Technologies, Inc. (NYSE: AEVA)
- Innoviz Technologies Ltd. (Nasdaq: INVZ)
- Allegro MicroSystems, Inc. (Nasdaq: ALGM)
- Ouster, Inc. (NYSE: OUST)
Best Lidar Stocks
Let’s dive deeper into each of these lidar stocks and see why they are a buy at the moment.
Aeva
Aeva is currently looking like one of the stronger lidar technology stocks to buy. This company is currently developing sensors for autonomous vehicles using frequency modulated continuous wave (FMCW) technology. That is a rather long acronym, but what you need to know is it enables highly precise light detection with long ranges. Aeva says this allows detection up to 300 meters, instantaneous velocity, and freedom from all interference.
This stock is a buy right now because it looks to be highly undervalued with strong growth stability. Its share price is lower than it was a year ago, but has remained relatively stable so far this year. The company is worth over $700 million by market cap. However, while we are still in the early stages of lidar technology, it has an earnings per share (EPS) of -$0.54.
Aeva’s Q1 2022 earnings report shows a lot of red but this makes sense as a newer tech company. While the company is not yet generating consistent profits, its technology promises to improvise self-driving capability. And already, we’re seeing a high level of sales growth over the past few years.
Innoviz
Innoviz is a manufacturer of solid-state lidar sensors and perception software. It aims to accelerate the mass production of autonomous vehicles. “Your next car will drive itself,” as its website says. The company’s first-generation Innoviz One can generate 3D images at up to 250 meters. It is also developing the Innoviz Two which will enable detection ranges of 0.1 to 300 meters.
The company has a market cap of over $450 million and, like many lidar stocks, its share price has decreased recently. As is seemingly par for the course with lidar, the company has a negative EPS of -$1.27.
While Innoviz is also not yet profitable, its Q1 2022 earnings show some positive signs. The biggest among them is a YOY increase in revenue of 144%, for a total of $1.77 million. That beat its projection by 3.8%. The company has also substantially increased its net profit margins, although they are still negative. It went from about -2,000% in Q4 2021 to around -1,700% in Q1 2022.
Allegro MicroSystems
Allegro MicroSystems is a little different from others on this list because it is not solely focused on lidar. The core of its business model is the development of microchip devices. However, it also provides power and sensing systems for motion control. In 2020, Allegro acquired Voxtel in order to develop lidar solutions.
Allegro was founded in 1990 and has a market cap of over $4 billion. Its stock does have a positive EPS of $0.61 and its P/E ratio comes in around 36. However, most of the numbers on its Q1 2022 earnings look quite strong. Its revenue was just over $200 million, a year-over-year increase of 14.4%. Its net income was up significantly with a YoY increase of close to 200%, closing the quarter at $25.6 million. The company’s profit margin was 12.8%, a YoY increase of 159%.
Ouster
Ouster is a global lidar technology company that manufactures 3D lidar sensors. Its products have many uses, including robotics, drones, security systems, defense and mapping. Its products, the OS0, OS1 and O2, have a number of uses. The OS0 for ultra-wide field-of-view, while the OS2 is best for long range—up to 240 meters
Ouster has a market cap of over $285 million, though, like most pure lidar companies, it has a negative EPS and that comes in at -$0.65. Its Q1 2022 earnings show revenue of $8.6 million, a YoY increase of about 30%. As Ouster continues to grow, it could show positive profits down the road.
Are Lidar Stocks a Good Investment?
One look at the graph of a lidar technology stock may look discouraging at the moment. Some of the stocks mentioned here have decreased by more than 50%, which may make it seem like lidar companies are not a good investment. However, the best lidar stocks to buy are about more than just their YTD performance.
The biggest reason many lidar stocks have struggled as of late is simple: we are still in the very early stages of this developing technology. Most of these companies are not profitable yet and are still developing their products. Plus, despite the promise of this advanced technology, it must get better and cheaper to be viable. That is likely at least a few years out.
Despite lidar being a future state technology at this point, though, some analysts are setting ambitious price targets for these stocks, even in the next 12 months. Thus, for investors willing to bet on the future, lidar stocks could be a good investment right now. Whether you are willing to do so is for you to decide.
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.