Luminar Technologies shares down 75% due to lack of scalable business model and revenue growth.

From Nasdaq: 2024-06-01 10:11:00

Tesla CEO Elon Musk predicts that all cars will eventually need to be smart cars, equipped with self-driving technology and sensors. Luminar Technologies develops lidar sensors for autonomous driving systems. Shares have dropped by 75% in the past year, raising questions about the company’s long-term viability and profitability.

Many companies went public through SPAC mergers, creating hype around emerging technologies. Luminar’s negative 83% return reflects a lack of scalable business model and limited revenue. Operating expenses of $460 million exceed sales of $76 million, with 69% of revenue coming from three customers, including Tesla, which poses a concentration risk.

Luminar’s connection to Tesla is uncertain, as Musk has expressed skepticism about lidar technology. With a lack of recurring orders and unclear usage of its products, Luminar faces challenges in generating steady profits. Considerations of cash burn rate, competition, and customer concentration make investing in Luminar a risky choice. The Motley Fool Stock Advisor team does not recommend Luminar as a top stock pick.



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