Wall Road analysts usually 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.
“Whereas VLDR’s 2Q21 outcomes had been under expectations,” the 5-star analyst stated, “We consider the corporate continues to progress on setting the inspiration of long-term development and know-how management.”
Income 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 Road’s name by $0.03. The corporate caught to its full yr 2021 steerage for complete gross sales between $77 and $94 million. The Road expects $85.1 million.
Regardless of 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 monitor the potential for complete income to achieve $1 billion by 2025.
“Whereas ADAS wins seem additional out (2026 ramp),” Rusch famous, “Nearer-term adoption amongst industrial clients has accelerated, diversifying VLDR’s buyer base.” Expanded agreements with present clients overlaying manifold functions, reminiscent of warehouse/logistics and final mile supply are additionally “encouraging.”
Through 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 “proceed to enhance sequentially.”
Velodyne shares have taken a hammering in 2021, down by a price obliterating 64%. But, Rusch is extremely assured the inventory can present massive returns for buyers.
“We shall be watching COVID headwinds on its contract producer relationships, however stay constructive on shares attributable to its IP, manufacturing, and buyer place,” the analyst summed up.
To this finish, Rusch charges VLDR an Outperform (i.e. Purchase) together with a $30 worth goal. Traders may very well be sitting on features of 262%, ought to Rusch’s forecast play out over the approaching months. (To observe Rusch’s monitor document, click here)
The remainder of the Road’s projections for VLDR point out a cut up between the believers and the fence sitters. The inventory’s Average Purchase consensus score is predicated on a fair 3 Buys and three Holds. Nevertheless, the bulls seem within the driving seat; going by the $14.83 common worth goal, shares shall be altering palms 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 rather vital to do your individual evaluation earlier than making any funding.