Velodyne Lidar

Velodyne Lidar (VLDR) Stock Forecast

San Jose, Calif.-based Velodyne Lidar is an autonomous vehicle light detection and ranging (lidar) sensor maker whose customers include Ford, GM and Google, to name a few.  The company’s lidar solutions are also used in driver assistance, delivery, robotics, navigation, mapping and other use cases. Its brand portfolio includes Puck, Ultra Puck, Alpha Prime, Velarray and Vella, the latter of which is lidar software. Velodyne Lidar is a spin-off of Velodyne Acoustics. As of 2022, there is a merger pending between Velodyne Lidar and fellow lidar maker Ouster. Velodyne Lidar reported revenue of almost $62 million in 2021.

How do we estimate VLDR will do in 2023? 

The VLDR stock forecast for 2023 is uncertain due to several variables, but the median stock price target among analysts is $1.08. The consensus rating among Wall Street analysts who cover VLDR is to hold the stock. Velodyne Lidar has a price-to-sales ratio of approximately 5.  

Velodyne Lidar is in the middle of a merger with industry peer Ouster, a deal that is expected to close in the second half of 2023. If the merger is successful, each share of VLDR will be exchanged for 0.8204 shares of Ouster when the deal closes. As a result, existing shareholders in each stock will end up owning roughly 50% of the merged company. 

Lidar is a key component in self-driving technology. It is important to note that lidar stocks have been struggling leading up to 2023 due largely to the slow adoption of self-driving vehicles and a lack of profitability, including at VLDR. 

How do we estimate VLDR will do in 2024? 

Assuming that the merger between Velodyne Lidar and Ouster is completed on time, 2024 will be the first year that they operate as a combined company. 

The combined revenues of these companies should place VLDR in a better competitive position. This is especially true considering that Velodyne’s revenue fell in Q3 2022 from $11.5 million to $9.6 million and is lower on a year-over-year basis. Velodyne’s falling revenue should be a concern to investors considering that the company is also not profitable. 

On the positive side, the two companies together will hold hundreds of patents and available cash of $355 million. There’s reason to be cautiously optimistic about VLDR stock in 2024. 

Lidar stocks including VLDR could share in the momentum from a new self-driving electric vehicle to be unveiled by Apple, production for which is expected to begin in 2024 (though the vehicle isn’t expected to debut until 2026). The involvement of Apple could catapult the autonomous driving industry further and faster than it has come this far. 

How do we estimate VLDR will do in 2025? 

The VLDR stock forecast for 2025 depends on the status of lidar use cases such as autonomous driving and mapping as well as the integration of Velodyne Lidar with Ouster. 

Let’s say Velodyne Lidar and Ouster meet expectations to generate $172 million in revenue in 2023. And if they manage to grow revenue at 30-40% (the pace that Ouster has been growing its revenue), then the combined entity could be looking at revenue of $232 million by 2025. 

Meanwhile, one forecast suggests that the worldwide lidar market will grow at a CAGR of 15.4% in the five years leading up to 2025. Growth will be fueled by growing demand for mapping and surveying across sectors of the economy. In addition to transportation, demand for lidar is expected to originate from sectors like agriculture and infrastructure. 

There could also be more consolidation in the lidar industry by 2025, which would likely present more competition to Velodyne Lidar. 

How do we estimate VLDR will do in 2030? 

Assuming that the auto industry continues to move in the direction of autonomous driving, the VLDR stock forecast could be optimistic for 2030. In fact, estimates suggest that the lidar-sensor market in which VLDR operates will be valued at $5.6 billion by 2031. This would strengthen demand for lidar and could be a potential catalyst for VLDR stock price. 

In addition, research firm McKinsey predicts that as many as 15% of total cars sold in 2030 could be autonomous in design, assuming that there is greater regulatory clarity by then. If this proves to be true, it could be another tailwind for lidar stocks like VLDR. 
GrandView Research forecasts the lidar market, which was worth $1.8 billion in 2021, will expand at a CAGR of just below 10% in the eight years leading up to 2030. In addition to transportation, advances in mapping technology are expected to be a major driver of this growth.

FAQ

Who are VLDR’s biggest competitors?

A few key competitors include Hesai Group, Innoviz Technologies,  Luminar Technologies.

Why is there consolidation happening in the lidar sector?

Lidar stocks are an emerging sector due to the early stage of self-driving vehicles. Many lidar stocks have performed poorly, which is expected to result in consolidation.

What are some of the risks in investing in VLDR stock?

VLDR is a bet on autonomous driving, and adoption faces regulatory hurdles. Though not likely, the merger between VLDR and Ouster could potentially fail, which would likely be a setback for the company in this increasingly competitive landscape.

Is VLDR a good stock to own?

If you believe in the future of autonomous driving and other lidar applications such as mapping, robotics and driver assistance, then you might want to consider VLDR, one of the leading companies in the lidar market.