Light detection and ranging (LiDAR) technology creates a three-dimensional visual image. It includes a high-intensity laser tool, a micro-electro-mechanical system (MEMS), and a GPS transceiver. Lidar technology should face strong demand in different industries, including automotive, healthcare, aerospace and defense, IT, and others.
According to Fortune Business Insights, the global lidar market is estimated to expand at a CAGR rate of 22.7% during 2019-2026, hitting $6.71 billion in the terminal year. This growth will be driven by increasing demand for lidar from Unmanned aerial vehicles (UAVs) and autonomous vehicles. In addition, innovations in 3D and 4D imaging technology and a higher need for 3D Flash lidar should boost the industry.
In this article, I am going to analyze and compare two lidar stocks: AEye, Inc. (LIDR) and Aeva Technologies, Inc. (AEVA). Both companies engage in the development of lidar systems. Over the past six months, AEVA stock has dropped about 28%, outperforming its rival AEye, which decreased around 52% over the same period.
Recent Developments
On December 8th, AEye announced that it had signed a common stock purchase agreement with Tumim Stone Capital LLC. Under the terms of the deal, the company can sell up to $125 million of its common stock to Tumim Stone during the 36 months. AEye plans to use net proceeds for working capital and general corporate purposes, fueling its future growth.
On November 10th, Aeva announced that it had entered a multi-year supply agreement with a global provider of self-driving truck technology, known as Plus. The company will supply its automotive-grade long-range 4D lidar for the production of autonomous trucks with the PlusDrive system on board.
Financial Overview & Analysts’ Estimates
AEye, Inc. last issued its earnings results on Friday, November 12th. For its fiscal third quarter, AEye's total revenues decreased 88.8% on a year-over-year basis, standing at $127,000. This decrease was due to the absence of development contracts revenues in the third quarter of 2021. Not surprisingly, the company missed the Wall Street consensus by $473,000. Its GAAP EPS has been reported at ($0.15), missing estimates by $0.10.
However, the company strengthened its liquidity positions, increasing its cash on hand and marketable securities from $15.28 million as of December 31st, 2020, to a total of $182.38 million as of September 30th, 2021. With a cash burn rate of $39.59 million as of nine months ended September 30th, 2021, the company should not face any liquidity problems in the foreseeable future.
Currently, Wall Street expects AEye's EPS to be ($0.1) in the fourth quarter of 2021. Its revenue for the next quarter is estimated to come in at $600,000. Analysts expect LIDR to generate its first solid revenues of $12.17 million in FY2022.
In the third quarter of 2021, Aeva Technologies' revenue was up 78.5% on a year-over-year basis to $3.48 million, driven by higher non-recurring engineering services revenue. Also, the company managed to surpass Wall Street consensus estimates by $0.48 million. Aeva Technologies reported Non-GAAP EPS of ($0.09), topping Wall Street expectations by $0.01.
The company ended the quarter with cash, cash equivalents, and marketable securities of $477.7 million. Considering Aeva's nine-month cash burn rate of $57.16 million, its liquidity position looks strong with no need for capital raise.
For the next quarter, analysts expect AEVA's earnings to grow 91.46% to (0.10) per share. Following this trend, analysts forecast that its 4Q2021 revenue should rise to $2.73 million. This estimate implies a rise of 273.41% on a year-over-year
Comparing Options Market Sentiment
Looking at the January 21st, 2022 option chain for both LIDR and AEVA, we can determine options market sentiment by analyzing the calls/puts ratio. In LIDR's case, the open calls/open puts ratio at the $5.00 strike price comes in at 1.91x, implying a bullish options market sentiment. When it comes to AEVA, the open calls/open puts ratio at the $10.00 strike price is 2.23x, indicating a bullish options market sentiment as well.
Conclusion
While AEye and Aeva Technologies should benefit from the lidar industry’s growth in the long term, I believe Aeva Technologies is currently a better investment based on its superior financials, higher forward growth rates, and better open calls/puts ratio.
LIDR shares were trading at $5.22 per share on Monday morning, up $0.38 (+7.85%). Year-to-date, LIDR has declined -51.12%, versus a 28.82% rise in the benchmark S&P 500 index during the same period.
About the Author: Oleksandr Pylypenko
Oleksandr Pylypenko has more than 5 years of experience as an investment analyst and financial journalist. He has previously been a contributing writer for Seeking Alpha, Talks Market, and Market Realist.
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