![]() ![]() Well, revenues continued to go south and fell $90 million short of that SPAC-hyped projection from a couple of years ago. ![]() However, 2021 was supposed to be when revenues started to rebound to reach $152 million. Velodyne actually warned investors revenues would decrease for a few years as the average selling price of its products dropped. The thing about Velodyne is that revenues have been steadily dropping on purpose, because the company is scaling the technology quickly to accelerate adoption. Compare that to a solid-state LiDAR with no moving parts called the Velarray M1600 that’s designed for mobile robots delivering pizza to stoners too paranoid to leave home. For example, its flagship LiDAR, Alpha Prime, has a range of nearly 1,000 feet that is capable of real-time high-res perception at highway speeds. It also boasts a large portfolio of products that address different markets. Velodyne was the first LiDAR company we profiled and also the first to go public via SPAC. Instead, we’ll start with the least valuable on paper but the one currently leading in revenue that’s nearly double of its next closest competitor. Normally, we’d lead off a list with the most valuable company by market cap. That means the technology is now scalable and cost competitive with other sensors like radar and cameras. Now, that same company, Velodyne, recently introduced a LiDAR unit for about $100. An early, bulky system from one of the leading companies on our list would cost upwards of $75,000 less than 10 years ago. It’s definitely the more accurate technology, but used to be way too expensive to be practical. We have a lot of companies to cover, so let’s briefly recap the bull case for LiDAR, which is kind of like radar, except that it uses light waves rather than radio waves to detect objects and map its surroundings. Are these premiums merited? Let’s try to find out while we search through the LiDAR SPAC wreckage to see if there’s anything worth salvaging. ( We don’t invest in companies that have simple valuation ratios over 40). CompanyĪccording to our calculations, at least half these stocks are overvalued. One last metric we can look at is our simple valuation ratio to see how these firms are relatively valued. It seems there could be some fundamental problems with their business. That was at a time when their revenue growth had slid for four straight years as management assured investors that was all part of some strategic price calibration strategy. ![]() The lofty expectations they set in the glossy SPAC deck hardly came true. Now we start to see why Velodyne Lidar has performed so poorly. Below we’ve provided three metrics for each SPAC – predicted 2021 revenues, actual 2021 revenues, and percentage difference between the two. That sort of valuation should come with revenues to match, and that’s where things don’t seem to add up. When it comes to the largest company by market capitalization, Luminar is currently 5X the size of their nearest competitor, Aeva Technologies, and worth more than all their competitors combined. While Aeva and Innoviz are trading at a premium to their 2019 venture round valuations, Velodyne’s valuation has dropped nearly 75% since their Series B in late 2018 ( more on this in a bit). Three of these SPACs have pre-SPAC valuation rounds ( courtesy of PitchBook) we can compare against today’s valuations. CompanyĪs beaten down as most these stocks are, we need to watch out for value traps, something we talked about in our recent piece on Avoiding Value Traps in Beaten Down SPACs. Here’s how they’ve performed since all debuted at the same price – $10 a share. The frenzy over SPACs has largely subsided, and we’re left with eight LiDAR stocks from which to choose. So far, though, we’ve steered clear of LiDAR stocks since they started to pop up in the public markets in 2020 by merging with special purpose acquisition companies ( SPACs). And that’s why we continue to return to the idea of LiDAR stocks. That’s why we’re interested in a pick-and-shovel stock that would give real exposure to autonomous vehicles now before the big boom. Yes, yes, we know: It’s one of those emerging technologies we’re always waiting for to emerge, outside of some San Francisco techno-hipster enclave where a few startups are testing robotaxis. We think the grass could be even greener when it comes to self-driving cars. Intuitive Surgical ( ISRG) stock is undoubtedly the best option for investors interested in the robot-assisted surgery theme, but we’re not yet convinced that’s the robotic automation market with the most potential, though there’s plenty of upside when it comes to the market for minimally invasive surgery. ![]() Last month, we started our search for a robotics stock to replace the robotics ETF in our Nanalyze Disruptive Tech Portfolio. ![]()
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