Will Luminar Technologies Need To Raise $1B In Capital? This Bearish Analyst Answers

Zinger Key Points
  • Analysts expect it could take until 2030 for the company to achieve "cash flow breakeven."
  • Raising capital would “meaningfully dilute existing shareholders."
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Shares of Luminar Technologies Inc LAZR were tanking in early trading on Wednesday.

Volume forecasts for the company have been reduced meaningfully to reflect model launch delays and lower expectations for vehicles adopting the LIDAR technology, according to BofA Securities.

The Luminar Technologies Analyst: John Babcock downgraded the rating for Luminar Technologies from Neutral to Underperform, while slashing the price target from $3.50 to $1.20.

The Luminar Technologies Thesis: The company’s volumes are likely to be impacted by weaker demand for EV (electric vehicles) due to “affordability challenges, range/charging anxiety and falling residual values,” Babcock said in the downgrade note.

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“Commentary from suppliers at our recent 2024 BofA Auto Summit suggests OEMs are delaying or slowing down some model launches, specifically for EVs,” the analyst wrote.

“Coupled with higher near-term costs, we now expect it could take until 2029/2030 for the company to achieve EBITDA and cash flow breakeven vs. our prior forecast for breakeven in 2027/2028,” he added.

Against this backdrop, Luminar Technologies may need to raise $1 billion in incremental capital through 2025, which would “meaningfully dilute existing shareholders,” Babcock stated.

LAZR Price Action: Shares of Luminar Technologies had declined by 8.59% to $1.76 at the time of publication on Wednesday.

Photo courtesy of Luminar

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