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. The robustness of 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. It is easy to see how this could be applied to self-driving technologies, which has been the primary application of most lidar systems.
However, lidar has uses well beyond self-driving, 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 is currently looking like one of the strongest lidar 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 it has seen modest growth since October 2021. The company is worth over $2 billion by market cap. However, while we are still in the early stages of Lidar, it has an earnings per share (EPS) of -1.161.
Aeva’s Q3 2021 earnings report shows a lot of red; on the plus side, it had a year-over-year (YOY) increase of 79% in its earnings for a total of $3.48 million. For perspective, it had earnings of just $308K for Q1 2021 and $2.6 million for Q2. While the company is not yet generating consistent profits, its technology promises to improvise self-driving capability.
Best Lidar Stocks: 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 just under $900 million and, like many lidar stocks, its share price has been increasing recently. As is seemingly par for the course with lidar, the company has a negative EPS of -2.37. However, analysts have 12-month price targets that are generally around 30% higher than its current price.
While Innoviz is not yet profitable, its Q3 2021 earnings show some positive signs. The biggest among them is a YOY increase in revenue of 13%, for a total of $2.08 million. That beat its projection by 3.8%. The company has also substantially increased its cash on hand. It had $139.57 million in cash at the end of the quarter; at the end of Q4 2020, it had $50 million.
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 $6 billion. Its stock does have a positive EPS of 0.24, though it’s P/E ratio is quite high at 132.32. However most of the numbers on its Q3 2021 earnings look quite strong. Its revenue was $193.6 million, a year-over-year increase of 41.68%. Its net income was up significantly with a YoY increase of 246%, closing the quarter at $33 million. The company’s profit margin was 17%, a YoY increase of 144.5%.
Lidar Stocks to Buy: Ouster
Lidar 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 $1 billion, though, like most pure lidar companies, it has an negative EPS of -1.16. Its Q3 2021 earnings show revenue of $7.76 million, a YoY increase of 30%. While it is not yet profitable, it moved closer to profitability this quarter with a YoY increase of 50% in net profit margin. It also increased cash substantially year-over-year, by $1,106%, to $221.58 million. Analysts are also suggesting sharp increases in its share price over the next 12 months.
Are Lidar Stocks a Good Investment?
One look at the graph of a lidar 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 stocks 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 better 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.
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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 its 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.