Velodyne Lidar Review: vision for robots and 40 years of history

Velodyne LidarVLDR1,30 $

What he earns

The company produces lidars - laser rangefinders, who use the technology of measuring distance by emitting light and measuring the time of its return to the receiver.

Lidars are used in almost all modern technological fields.: they are used to measure distances in cartography, they serve as "eyes" for robots like the famous Spot from Boston Dynamics, as well as for autopilot systems in cars, can monitor the blind spots of truck drivers and more.

Velodyne Lidar products are divided into four categories:

1. Environment sensors, which have 360-degree "vision" and provide the most complete measurements in changing light levels or weather.
2. Solid-state lidars for measurements at the shortest distances or alternating short and long measurements. Most in demand for solving problems in the areas of advanced driver assistance systems and robotics.
3. Infrastructure solutions for smart city applications in the field of traffic monitoring and traffic jam prediction, management of modern urban spaces and other manifestations of algocracy.
4. Vella Development Kit App, which makes access to the functionality of the company's lidars accessible and flexible, provides additional functionality and control.

What's wrong

IPO in 2020 through merger with SPAC. The company went public in the midst of the 2020 IPO boom, which, in terms of the number of new companies on the market, overtook the previous record of the dot-com boom - even the pandemic did not interfere, a loose monetary policy FED in the USA only gave determination to business in its bold undertakings.

Multiple issuers, including Velodyne Lidar, made their way to the exchange easier by merging with SPAC - a shell company, which is created specifically for the future listing of a "real" business through a merger.

But behind hundreds of percent growth in single companies, less attention is being paid to the more common IPO scenario., when stocks take off in the short term after the start of trading, and then move on to a protracted fall for long weeks and even months.

This is what happened with Velodyne Lidar, whose securities have risen to the maximum higher 30 $, then quickly fell, rose again, but failed to update price highs in December 2020, then went on to a long fall, which continues today at a share price slightly less than 2 $.

Now the company will have to try very hard, not only to attract new long-term investors to your business, but also to regain the trust of the old.

A sweeping decline in forecasts. After the first quarter report 2022 several analysts at once lowered their forecasts for the company's revenue and share price, and at the same time, they expect the business's losses to grow this year.

Certainly, no one can know the situation in the global economy and future market movements, therefore, any forecasts should hardly be taken as an indisputable truth., but the unanimous decline in expectations from several professional market participants at once deserves people's attention, who are potentially interested in investing in Velodyne Lidar.

Guide Sales. Smallest, but what is still noticeable in the context of this review is the fresh sale of shares by five members of the company's management 12 May - immediately on the next day after the execution of the next options to purchase the employer's securities for 0 $ four of them.

In total, a little more than 5,000 shares were sold, which does not look like a panic sale of everything and everything by managers running away from business, but that fact, that employees dumped company shares at very low prices the day after they received them for free allows us to conclude modestly that, what's up with velodyne lidar, maybe, don't go too well.

On the other hand, the only recent sole purchase of 40,000 shares 10 May looks more informative and may indicate that, that some employees rightly believe in the long-term prospects of their company.

What good

Recovery of revenue indicators. The market is slowly recovering from the impact of the pandemic, which affects the main financial indicators of the company: in three months of 2022, Velodyne Lidar's revenue almost repeated the result of the entire 2021, and it seems, that over the remaining three quarters, total revenue for the year could return to 2019 and exceed them.

Revenue of the company, million dollars

101

Maintain debt levels. Despite a modest capitalization for the technology sector of approximately $379 million, the company does not appear to be financially vulnerable by maintaining its debt metrics in order: equity exceeds liabilities by almost 4 Times, and the debt ratio is at a comfortably low value 0,22.

Liabilities and equity, million dollars

Market of the Future. In this case, the target market really speaks in favor of the long-term success of the company.: a large proportion of the use of lidars falls on high-tech and the most relevant technological solutions in the field of robotics, Internet of Things and Automotive. In the current presentation, the potential market by 2026 is estimated at almost $6 billion.

Assessment of the potential sales market by 2026

5,7 billion

What's the bottom line?

Velodyne Lidar repeated the history of many proactive IPOs with a short-term rise in the early stages of trading and a long fall in the following months and years.

Now the company is quite inexpensive and embodies the thesis from Benjamin Graham's The Intelligent Investor that, that high-profile initial offerings can become really interesting in a few years after going public, when the share price drops significantly and no one needs the securities.

The company has a quality product, which is in demand by many of the most technologically advanced and advanced business sectors, therefore, the strategic success of Velodyne Lidar on the horizon of the next 5-10 years or more seems quite real, if management does not make fatal managerial mistakes in the short term.