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Velodyne Lidar (NASDAQ: VLDR), a company that produces lidar sensors used in self-driving vehicles, saw its stock jump over 60% in after-hours trading on Monday after regulatory filings indicated that Amazon has received warrants to purchase 39.6 million of the company’s shares. While Amazon has been increasingly interested in autonomous vehicles, as it looks to bring down logistics costs for its e-commerce business, Velodyne stock has also been trading cheap, presenting a good entry point. Velodyne stock has plummeted by over 80% over the last year, driven by corporate governance issues relating to its founder and former chairman, and a mixed financial performance, with sales dropping by almost 43% over the first nine months of 2021 with net losses also widening.

So is Velodyne stock a buy at levels of $6, its Monday after-hours trading price. It probably is. Lidar is seen as a cornerstone of self-driving systems. Most automotive OEMs (apart from Tesla) are opting for the technology for their autonomous driving roadmaps and Velodyne happens to be one of the biggest and oldest players in the nascent market. Velodyne’s underlying business has actually been gaining some traction lately. Although revenues declined through early 2021, due to lower average selling prices, and a pivot toward smaller consumer affordable solid-state sensors over the high-performance, high-cost lidar sensors that it previously focused on, volumes have been ramping up nicely. The company shipped a total of 4,400 sensor units during Q3 2021, up from around 2,600 units in Q1. Moreover, the company has also been signing on more customers with multi-year agreements, which should help to improve revenue visibility for the company. Velodyne had a total of 35 multi-year agreements as of early November 2021, up from around 26 agreements at the end of 2020. Considering the recent sell-off, the vote of confidence from Amazon, and the long-term growth prospects in the lidar space, we think that Velodyne stock is worth considering for investors looking to play the self-driving market.

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Below you’ll find our previous coverage of Velodyne stock where you can track our view over time.

[11/9/2021] What’s Next For Velodyne Lidar Stock After 28% Gain Over The Last Month?

Velodyne Lidar (NASDAQ: VLDR), a company that produces lidar sensors used in self-driving vehicles, has seen its stock rally by about 28% over the last month (twenty-one trading days), outperforming the S&P 500 which rose about 7% over the same period. Although Velodyne posted weaker than expected Q3 2021 results last week and remains tied up in a battle with its founder and former chairman, the broader positive sentiment in the electric vehicle space appears to be helping the stock. For instance, EV players have been posting strong delivery numbers despite the ongoing chip shortage and the stock price of EV bellwether Tesla has also seen a 45% rally over the last month. This positive news has helped self-driving technology players, which are seen as going hand in hand with electric vehicles.

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So is VLDR stock likely to rise further in the coming weeks and months or is a correction looking more likely? Per the Trefis machine learning engine which analyzes historical stock price movements, VLDR stock only has a very small chance of a rise over the next month (21 trading days). See our analysis Velodyne Stock Chance of Rise for more details.

Five Days: VLDR 12%, vs. S&P 500 1.9%; Outperformed market

(8% event probability)

  • Velodyne stock rose 12% over a five-day trading period ending 11/8/2021, compared to the broader market (S&P500) which rose 1.9% over the same period.
  • A change of 12% or more over five trading days has an 8% event probability, which has occurred 55 times out of 686 in the last three years.

Ten Days: VLDR 17%, vs. S&P 500 2.9%; Outperformed market

(8% event probability)

  • Velodyne stock rose 17% over the last ten trading days (two weeks), compared to the broader market (S&P500) which rose by 2.9%.
  • A change of 17% or more over ten trading days has a 8% event probability, which has occurred 56 times out of 686 in the last three years.

Twenty-One Days: VLDR 28%, vs. S&P 500 7.1%; Outperformed market

(9% event probability)

  • Velodyne stock rose 28% over the last twenty-one trading days (about one month), compared to the broader market (S&P500) which rose by 7.1%
  • A change of 28% or more over twenty-one trading days has an 9% event probability, which has occurred 59 times out of 685 in the last three years.

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[10/6/2021] What’s Happening With Velodyne Lidar Stock?

Velodyne Lidar (NASDAQ: VLDR), a company that produces lidar sensors used in autonomous vehicles, has seen its stock decline by about 6% over the last week (five trading days), underperforming the S&P 500 which has remained roughly flat over the same period. The stock has also lost a whopping 70% of its value year-to-date, as the company faced governance-related issues amid a tussle between its founder, who was ousted earlier this year, and the SPAC that acquired the company. The stock has also been impacted by the company’s weaker than expected Q2 2021 results and also by the broader sell-off in futuristic stocks following the Covid-19 reopening. So is Velodyne Lidar stock likely to decline further in the coming weeks or is a rally looking more likely? According to the Trefis Machine Learning engine, which analyzes Velodyne’s historical stock price data, the stock has a roughly equal chance of a rise or a decline over the next month. See our dashboard analysis on Velodyne Lidar Chance Of Rise for more details.

However, there’s probably still a good reason for long-term investors to consider the stock. Velodyne is a pioneer in the Lidar space and the company’s underlying business has actually been gaining some traction lately. The company shipped a total of 3,800 sensor units during Q2 2021, up from around 2,600 units in Q1. Moreover, the company has also been signing on more customers with multi-year agreements, which should help to improve revenue visibility for the company. Velodyne had a total of 34 multi-year agreements as of early August 2021, up from around 26 agreements at the end of 2020. Although a bulk of the company’s business presently comes from pricier sensors for R&D projects and prototypes, it is looking to double down on the mass market, targeting total shipments of as much as 9 million by 2025. Velodyne is also looking to transition its manufacturing offshore, in a move that could improve margins and cut overhead costs. Now considering the big sell-off and the long-term growth prospects in the lidar and self-driving vehicle market, we think this could be a decent entry point for Velodyne stock.

[7/8/2021] Is Velodyne Stock A Buy After Big Sell-Off?

Velodyne Lidar (NASDAQ: VLDR), a company that produces lidar sensors used in autonomous vehicles, has seen its stock decline by about 15% over the last week (five trading days). The stock also remains down by over 50% year-to-date. The recent decline comes as the company was accused of stealing trade secrets relating to optical enclosures by Criterion Technology. While Velodyne has said that it was in the early stages of assessing Criterion’s complaint, it believes that the claims have no merit, noting that it would defend itself vigorously. Separately, Velodyne has also faced selling pressure in recent months, driven by its weaker than expected revenue guidance for FY’21 and also seeing some corporate governance-related issues. (see updates below). So is Velodyne Lidar stock likely to decline further in the coming weeks or is a rally looking more likely? According to the Trefis Machine Learning engine, which analyzes Velodyne’s historical stock price data, the stock has a strong chance of a rise over the next month. See our dashboard analysis on Velodyne Stock Chances Of A Rise for more details.

So what’s the longer-term outlook like for the company? Although the impact of the complaint relating to trade secrets and the governance-related issues are hard to gauge at this juncture, the prospects for Velodyne’s business and the broader lidar industry look good. Lidar technology is seen as a cornerstone of self-driving systems, which are one of the hottest areas in the automotive market. Most automotive OEMs (apart from Tesla) are opting for the technology for their autonomous driving roadmaps and Velodyne happens to be one of the biggest players in the nascent market. Unlike most lidar companies, which are in the development or test phase, Velodyne already generates revenues from commercial deployments. Revenues stood at $18 million in Q1, ahead of rival Luminar which posted sales of about $5 million. The growth prospects also look solid, with the company working on 198 potential projects across over 25 industries. Velodyne said that it had a total of 29 total active multi-year agreements (which are seen as being relatively more firm). While the company shipped about 2,700 Lidar units in Q1 (mostly pricier sensors for R&D projects and prototypes), it is looking to ship as many as 9 million lidar units by 2025, driven by its move into the mass market and via its expanding partnerships. Considering the recent sell-off and the long-term growth prospects in the lidar space, we think that Velodyne stock is worth considering for investors looking to play the self-driving market.

[4/13/2021] How Is Velodyne Lidar Stock Faring?

Velodyne Lidar (NASDAQ: VLDR) is a company that produces lidar sensors that are primarily used in self-driving and autonomous vehicles. Velodyne stock has declined by over 40% year-to-date, due to mixed fourth-quarter results and also due to some corporate governance-related issues. However, there have been some positive developments relating to the stock in recent weeks. Earlier this month, Velodyne signed a multi-year agreement with AGM Systems, a Russian company that develops and integrates laser equipment for mobile and air applications. Velodyne’s Ultra Puck lidar sensor will be used in the new AGM-MS3 Unmanned Aerial Vehicles. Velodyne will also supply its 360-degree Puck lidar sensors for autonomous security robot company Knightscope’s future fifth-generation robots, expanding on its multi-year relationship with the company.

Now while these wins outside the automotive market are encouraging, much of the long-term volume growth for Velodyne will still come from the automotive market. For perspective, the company is targeting a total of as many as 9 million lidar units to be shipped by 2025 compared to cumulative shipments of just about 51k units through 2020. We think that upcoming products such as the lower-priced H800Velarray Solid-State Lidar (likely to be priced at around $500) – which can be used for driver assistance and autonomous driving systems will be key to Velodyne’s long-term prospects.

Is Luminar, another lidar player, a better pick compared to Velodyne? See our dashboard Velodyne Vs. Luminar: Which Lidar Stock Should You Pick? for more details.

[3/12/2021] Why Velodyne Stock Has Been Trending Lower

Velodyne Lidar (NASDAQ: VLDR), a company that produces lidar sensors that are primarily used in self-driving vehicles, has seen its stock decline by about 40% over the last month. So what’s driving the stock lower? Firstly, both the company’s Chairman of the Board and Chief Marketing Officer were replaced last month, after they were found to have behaved inappropriately with regard to Board and Company processes. [1] Although the specific details have not been provided by the company, investors see corporate governance issues as a red flag and the stock fell by about 30% in the days following the news. Secondly, the company posted a larger than expected loss and declining revenues over Q4 2020, as it continued to reduce prices for its sensors, in order to attract new customers and drive higher volumes. While Velodyne shipped a record 4,237 sensor units, its revenues fell by about 6% year-over-year to $17.85 million. Separately, rising bond yields over the last month have taken some sheen off richly valued tech stocks. This has also likely impacted Velodyne which trades at over 25x forward revenues.

Is Luminar, another lidar player, a better pick compared to Velodyne? See our dashboard Velodyne Vs. Luminar: Which Lidar Stock Should You Pick? for more details.

[12/29/2021] Velodyne Vs. Luminar: Which Lidar Stock Should You Pick?

Velodyne Lidar (NASDAQ: VLDR) and Luminar Technologies (NASDAQ: LAZR), two companies that specialize in lidar technology, went public this year. Lidar – a laser-based technology, which essentially helps computers detect surrounding objects – is poised to grow meaningfully, driven by the broader adoption of self-driving cars, helping both companies. However, the two stocks are valued rather differently. While Luminar’s market cap stands at roughly $10 billion, trading at over 350x projected 2021 revenue, Velodyne – which is actually the more established player in the lidar market – is valued at under $4 billion, or a P/S multiple of about 25x. Let’s take a look at the two companies’ businesses to understand what’s driving the disparity in their valuation and which could be the better pick.

See our dashboard analysis Velodyne Vs. Luminar: Which Lidar Stock Should You Pick? for an overview of the two companies’ valuation and fundamental performance in recent years.

Luminar’s Tech Hits The Sweetspot For Mass Market

Velodyne has largely focused on high-performance, high-cost lidar sensors. The company’s sensors (such as the 360-degree units that are placed on a vehicle roof) are typically used in prototype self-driving cars and other relatively lower volume applications such as research and development. Based on cumulative shipments and revenue data from the company’s form S-1, its sensors cost an average of $14k per unit. The company posted revenues of over $100 million in 2019, down from about $142 million in 2018, due to lower average selling prices and a larger mix of lower price sensors sold.

Luminar, on the other hand, is focused on building sensors that can be used in mass-market vehicles. The company’s sensors are expected to hit the sweet spot for automakers, costing under $1,000 per unit while offering very strong performance relative to their price. For example, Luminar claims its lidar has an industry-leading viewing range of 250 meters. The company is focusing on signing large long-term deals, noting that it has partnered with 50 companies, including 7 of the top 10 global auto players. Volvo’s next-gen electric vehicle, estimated to launch in 2022, will likely be the first consumer vehicle to use Luminar’s high-performance lidar system.

What Are The Risks?

While Luminar’s differentiated technology and promise of low costs are encouraging, there are risks. The company has yet to begin volume production and there could be challenges as it scales up. For perspective, Luminar noted that it expects to sell just 100 lidar sensors in 2020 and the consensus Revenues estimates for the company stand at just about $15 million this year. Separately, Velodyne also appears to be eyeing Luminar’s turf with new sensors that are cheap enough for the mass market. The company recently unveiled a new sensor called H800, which can see up to 200 meters and can apparently be mass-produced for as little as $500. Luminar’s high valuation, the increasing competition, and potential challenges surrounding its production ramp could make its stock the riskier bet at this point, although its upside could also be higher.

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Source: Forbes

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