Deutsche Bank remains cautious on Luminar Technologies given uncertainty with Volvo, non-core exit

[Self drive autonomous vehicle, driverless car, artificial intelligence, lidar, avoidance]
Just_Super

Luminar Technologies (NASDAQ:LAZR [https://seekingalpha.com/symbol/LAZR]) surrendered four days’ worth of gains and set an all-time low on Wednesday in the wake of disappointing second quarter results [https://seekingalpha.com/news/4484312-luminar-technologies-shares-slide-on-missed-q2-results-lowered-fy25-outlook] and a downbeat outlook for the year as vehicle production is expected to slow in the second half of this year.

Deutsche Bank’s Edison Yu suggests any production shortfalls could be offset by commercial opportunities, namely helicopter and mining entities that could deploy the company’s Iris or Halo LiDAR technology, with low investment necessary for technology tweaks.

“While the company declined to comment on the growth potential, it seems optimistic about the revenue opportunities there, citing that it could be accretive to topline in the very near term,” Yu said in his research note to clients, noting that demand could also come from robotaxi companies.

But despite the potential for new revenue sources, Deutsche Bank remains cautious toward Luminar Technologies’ (NASDAQ:LAZR [https://seekingalpha.com/symbol/LAZR]) outlook as volume from Volvo appears “uncertain” and the exit of its non-core data business will wind down at a cost of $5M per quarter. Accordingly, Yu maintains a Hold rating on Luminar (NASDAQ:LAZR [https://seekingalpha.com/symbol/LAZR]) and drops his price target by 33% to $4.

On the company’s earnings call [https://seekingalpha.com/article/4812871-luminar-technologies-inc-lazr-q2-2025-earnings-call-transcript], CFO Tom Fennimore warned that the company remains underwater on its sensor business, selling them “at prices lower than what we can produce them at.” The company now expects to ship 20K sensors for total sales of $67M to $74M versus its prior outlook for 30-33K in shipments for total sales of $82M to $90M.

“The 1/3 reduction in sensor shipments anticipates lower customer demand [for the Volvo EX90 which is equipped with LiDAR technology] as the company did not stipulate volume minimums [with Volvo].

“As a company with minimal current revenue and no positive EBITDA or free cash flow for several years, there are several risks to the downside,” Yu warns, identifying those as a lack of urgency by automakers to launch L3 for consumer vehicles, competitors developing lower cost and better performance LiDAR, and eventual commoditization of LiDAR solutions once the hardware performance specs reach a certain threshold, enabling OEMs to buy the cheapest sensor without any associated value-add software.

While Seeking Alpha authors and Wall Street analyst all share a Hold rating on Luminar Technologies, Seeking Alpha's Quant rating views the stock as a Strong Sell with a Quant score of just 1.12 out of 5.

Luminar (LAZR [https://seekingalpha.com/symbol/LAZR]) shares are down 21% Wednesday, adding to its 83% year-over-year decline.

MORE ON LUMINAR TECHNOLOGIES

* Luminar: Keep Selling As Revenue Trouble Surges [https://seekingalpha.com/article/4812858-luminar-technologies-stock-keep-selling-as-revenue-trouble-surges]
* Luminar Technologies, Inc. 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4812872-luminar-technologies-inc-2025-q2-results-earnings-call-presentation]
* Luminar Technologies, Inc. (LAZR) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4812871-luminar-technologies-inc-lazr-q2-2025-earnings-call-transcript]
* Luminar outlines $67M–$74M 2025 revenue target, pivots to commercial markets, and plans Thailand manufacturing consolidation [https://seekingalpha.com/news/4484367-luminar-outlines-67m-74m-2025-revenue-target-pivots-to-commercial-markets-and-plans-thailand]
* Luminar Technologies' shares slide on missed Q2 results, lowered FY25 outlook [https://seekingalpha.com/news/4484312-luminar-technologies-shares-slide-on-missed-q2-results-lowered-fy25-outlook]