Velodyne Lidar, Inc. (VLDR) in San Jose, Calif., provides a real-time three-dimensional vision for autonomous systems worldwide. The company offers a broad lineup of directional sensors, close-range sensors, and software solutions. In comparison, Palo Alto, Calif.-based Aeva Technologies, Inc. (AEVA), through its frequency modulated continuous wave (FMCW) sensing technology, designs a 4D LiDAR-on-chip that enables the adoption of LiDAR across various applications.

Significant technological advancement and rising demand for 3D imagery in various industries are driving the growth of the lidar industry. Governments and various institutions around the globe are relying on lidar technology for topographical surveys, surveillance, monitoring purposes, and self-driving cars.

However, the global semiconductor chip shortage is expected to be a major headwind against the industry’s growth over the next few months. Also, a lack of awareness and knowledge about lidar among customers is recognized as a restraint for the market and, thus, lesser-known Lidar companies could find it challenging to stay afloat. So, let’s take a closer look at two lidar stocks VLDR and AEVA.VLDR's share price has slumped 36.6% over the past three months, while AEVA's has retreated only marginally over the period. Also, VLDR’s 26.2% loss over the past month compares with AEVA’s 19.3% loss.

Let’s compare these two stocks.

Recent Developments

On July 29, VLDR announced a new software development kit that allows customers to utilize the advanced capabilities of Velodyne’s Vella lidar perception software in their autonomous solutions. However, this product could  take a while to gain significant market share due to potential market  competition.

On August 10, AEVA announced a strategic collaboration with Nikon Corporation to bring Frequency Modulated Continuous Wave (FMCW) 4D LiDAR with unique micron-level measurement capability to high precision industrial automation and metrology applications. However, AEVA is not expected to benefit from this collaboration immediately because the product is expected to hit the market in 2025.

Recent Financial Results

VLDR’s total revenues declined 52.1% year-over-year to $13.60 million in its  fiscal second quarter, ended June 30. Its gross profit stood at a negative $5.78 million, down 141.7% from the same period last year. Its net loss attributable to the company increased 729.5% from its  year-ago value to $80.69 million. The company’s net loss per share increased 500% year-over-year to $0.42.

In comparison, AEVA’s revenues increased 58.7% year-over-year to $2.60 million in its fiscal second quarter, ended June 30. However, its loss from operations grew 397% from its year-ago value to $24.74 million, while its net loss increased 386.2% year-over-year to $24.07 million. The company’s net loss per share rose 175% year-over-year to $0.11.

Past and Expected Financial Performance

Analysts expect VLDR’s revenue to decline 35.5% in the current quarter and 16.6% in the current year. The company’s EPS is expected to decrease 142.9% in the current quarter and 35.3% in the current year. Furthermore,  its EPS is expected to decline at a 182.5% rate per annum over the next five years.

In comparison, AEVA’s revenue is expected to increase 102.8% in the current year. However, its EPS is expected to remain negative at least until  next year.

Profitability

VLDR’s trailing-12-month revenue is 14.5 times AEVA’s. And VLDR’s negative ROE and ROTC of 110.43% and 67.86%, respectively,  compare with AEVA’s negative 67.72% and 42.61%.

Valuation

In terms of forward EV/Sales, AEVA is currently trading at 118.81x, which is 89.7% higher than VLDR, which is currently trading at 12.28x. Also, AEVA’s  45.42 trailing-12-months Price/Sales ratio is 68.4% higher than VLDR’s 14.36.

Thus, VLDR is relatively affordable here.

POWR Ratings

Both VLDR and AEVA have an overall F rating, equating to Strong Sell in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

VLDR has a D grade for Value, while AEVA has an F grade for Value. VLDR’s 16.48 forward Price/Sales ratio is 326.4% higher than the 3.87 industry average, and in sync with its Value grade. In contrast, , AEVA’s 169.39 forward Price/Sales multiple is 4,282.1% higher than the industry average, and consistent with its F grade.

Both stocks have a grade D for Quality, owing to their lower-than-industry average profit margins. VLDR’s 7.09% gross profit margin  is 85.4% lower than the 48.68% industry average. AEVA, on the other hand, has a 43.82% gross profit margin, which is 10% lower than the industry average.

Of the 84 stocks in the Industrial - Machinery industry, VLDR is ranked #82. Alternatively, among the 67 stocks in the Auto Parts industry, AEVA is ranked #65.

Beyond what we’ve stated above, we have also rated both stocks for Stability, Momentum, Sentiment, and Growth. Click here to view VLDR ratings. Also, get all AEVA ratings here.

Click here to check out our Industrial Sector Report for 2021

The Winner

Both VLDR and AEVA are highly overvalued, considering their bleak profitability and growth potential. Thus, we think it may not make sense to bet on either  of these stocks now.

Our research shows that odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Industrial - Machinery industry here. Also, click here to view the top-rated stocks in the Auto Parts industry.

AEVA shares were unchanged in after-hours trading Wednesday. Year-to-date, AEVA has declined -45.60%, versus a 18.24% rise in the benchmark S&P 500 index during the same period.

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.

More...