Wall Street analysts typically inform buyers to close out near-term noise and deal with a inventory’s long-term prospects as a substitute. It’s a bit of recommendation reiterated by Oppenheimer’s Colin Rusch following Velodyne Lidar’s (VLDR) newest quarterly outcomes.
“While VLDR’s 2Q21 results were below expectations,” the 5-star analyst stated, “We believe the company continues to progress on setting the foundation of long-term growth and technology leadership.”
Revenue within the quarter hit $13.6 million, not solely down by 52.1% from the identical interval final yr, but additionally lacking the estimates by $3.75 million. Non-GAAP EPS of -$0.18 additionally missed the Street’s name by $0.03. The firm caught to its full yr 2021 steering for whole gross sales between $77 and $94 million. The Street expects $85.1 million.
Despite the misses, Rusch sees a lot to be buoyed about and notes the checklist of signed and awarded contracts in Q2 grew from 29 to 34, which retains on observe the potential for whole income to succeed in $1 billion by 2025.
“While ADAS wins appear further out (2026 ramp),” Rusch famous, “Nearer-term adoption among industrial customers has accelerated, diversifying VLDR’s customer base.” Expanded agreements with present clients masking manifold purposes, equivalent to warehouse/logistics and final mile supply are additionally “encouraging.”
During the quarter, Velodyne shipped 3,800 sensor items, and because the firm guided for greater than 3,800 1 / 4 within the yr’s second half, Rusch believes the product gross margin growth will “continue to improve sequentially.”
Velodyne shares have taken a hammering in 2021, down by a worth obliterating 64%. Yet, Rusch is extremely assured the inventory can present massive returns for buyers.
“We will be watching COVID headwinds on its contract manufacturer relationships, but remain constructive on shares due to its IP, manufacturing, and customer position,” the analyst summed up.
To this finish, Rusch charges VLDR an Outperform (i.e. Buy) together with a $30 worth goal. Investors may very well be sitting on good points of 262%, ought to Rusch’s forecast play out over the approaching months. (To watch Rusch’s observe file, click here)
The remainder of the Street’s projections for VLDR point out a break up between the believers and the fence sitters. The inventory’s Moderate Buy consensus score relies on an excellent 3 Buys and three Holds. However, the bulls seem within the driving seat; going by the $14.83 common worth goal, shares shall be altering arms for 79% premium, a yr from now. (See VLDR stock analysis on TipRanks)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is essential to do your personal evaluation earlier than making any funding.