Stifel has revised its price target for nLight (LASR, Financial), reducing it from $14 to $12, while maintaining a Buy rating on the shares. This adjustment comes after reviewing the initial earnings reports and forecasts from the applied technologies sector, which have generally surpassed expectations, especially among firms involved with hyperscaler and AI investments.
The financial firm anticipates that companies tied to infrastructure will largely meet expectations in their reporting and guidance. However, they have adjusted predictions for several companies, including a reduction in PC sales forecasts for AMD and a reassessment of Lattice Semiconductor's (LSCC) aggressive 2026 projections. Additionally, a cautious stance has been taken on IPG Photonics (IPGP) due to concerns regarding the automotive sector and the Chinese market.
The decision to lower price targets across the group reflects a broader trend of multiple compression, influenced by increased macroeconomic uncertainty and reduced market visibility.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for nLight Inc (LASR, Financial) is $14.67 with a high estimate of $20.00 and a low estimate of $11.00. The average target implies an upside of 92.98% from the current price of $7.60. More detailed estimate data can be found on the nLight Inc (LASR) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, nLight Inc's (LASR, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for nLight Inc (LASR, Financial) in one year is $10.79, suggesting a upside of 41.97% from the current price of $7.6. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the nLight Inc (LASR) Summary page.
LASR Key Business Developments
Release Date: February 27, 2025
- Total Revenue (Q4 2024): $47.4 million, a decrease of 9% from $51.9 million in Q4 2023.
- Product Revenue (Q4 2024): $31.7 million, down from $37.9 million in Q4 2023.
- Development Revenue (Q4 2024): Increased by 12% year over year to $15.7 million.
- Total Revenue (Full Year 2024): $198.5 million, a decrease of 5% from $209.9 million in 2023.
- Aerospace and Defense Revenue (2024): Increased 20% year over year to $109.5 million.
- Gross Margin (Q4 2024): 2%, negatively impacted by non-routine charges; adjusted gross margin would have been approximately 15%.
- Product Gross Margin (Q4 2024): 1%, adjusted for non-routine charges would have been approximately 20%.
- Development Gross Margin (Q4 2024): 6%, compared to 9% in Q4 2023.
- Non-GAAP Operating Expenses (Q4 2024): $17.7 million, compared to $17.4 million in Q4 2023.
- GAAP Net Loss (Q4 2024): $25 million or $0.51 per share, compared to a net loss of $13.2 million or $0.28 per share in Q4 2023.
- Cash Equivalents and Investments (End of 2024): $100.9 million, compared to $113.1 million at the end of 2023.
- Inventory (End of 2024): Decreased to $40.8 million from $52.1 million at the end of 2023.
- Funded Backlog (End of 2024): $167 million, 55% higher than at the end of 2023.
- Q1 2025 Revenue Guidance: Expected to be in the range of $45 million to $51 million.
- Q1 2025 Gross Margin Guidance: Total gross margin expected to be in the range of 13% to 17%.
- Q1 2025 Adjusted EBITDA Guidance: Expected to be in the range of approximately negative $6 million to negative $3 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue from Aerospace and Defense grew to more than 60% of total sales by the end of 2024, becoming the primary growth driver.
- Aerospace and Defense markets grew 20% year over year to a record $110 million.
- Backlog increased by more than 50% year over year in 2024 to a record $167 million.
- nLight Inc (LASR, Financial) is well-aligned with the Department of Defense's critical priorities, such as directed energy and laser sensing.
- The company has a strong pipeline of directed energy programs and laser sensing opportunities, expecting at least 25% revenue growth in Aerospace and Defense in 2025.
Negative Points
- Total revenue in the fourth quarter of 2024 decreased by 9% compared to the fourth quarter of 2023.
- Commercial markets faced challenges with revenue down 25% year over year due to competition from China and muted global manufacturing demand.
- Total gross margin in the fourth quarter was only 2%, significantly impacted by non-routine charges related to inventory reserves.
- GAAP net loss for the fourth quarter was $25 million, or $0.51 per share, compared to a net loss of $13.2 million in the fourth quarter of 2023.
- The company faces execution challenges and timing issues with the delivery of defense products, impacting revenue recognition.
