The auto industry is changing in a multitude of ways. Electric powertrains are challenging the traditional combustion engine, and other technologies, such as mobile wireless connectivity and artificial intelligence, are bringing a sea change to the way we drive. New opportunities are opening for investors in these emerging technologies. These aren’t going to be risk-free choices – remember how many car companies popped up in the 1920s and ‘30s before Detroit stabilized with the Big Three – so the ‘trick’ to success will be recognizing potential winners.
In this context, it’s worth noting LiDAR, the sensor technology crucial for enabling autonomous cars. LiDAR merges high sensitivity with AI, giving rise to intelligent sensors for autonomous vehicles. Despite its potential, early investors in LiDAR have faced challenges. The sector experienced overvaluation due to a surge of SPAC transactions as emerging companies sought capital. Nonetheless, the dynamics around this are changing, as explained by Craig Hallum analyst Richard Shannon.
“While the lidar space has been a poor performer since many of these stocks went public in the past 2-3 years, these stocks have started to bottom out in the last quarter… We think this is due to low valuations (negative EV in some cases, albeit using the last reported qtr’s cash) and the prospect of major awards to be announced in the next 6-18 months. As such, we think it’s now time for investors to more seriously consider the lidar space for long-term investment,” Shannon opined.
Shannon isn’t just analyzing the LiDAR industry as a whole, he’s also putting his finger on two stocks that he sees as winners. Looking into their details through the TipRanks database, we find that these are low-cost stocks – both well under $10 per share – and Shannon sees plenty of upside potential in them.
Cepton, Inc. (CPTN)
We’ll start with Cepton, an early researcher and builder in LiDAR tech that has been pushing the boundaries of how and where LiDAR can be used. The technology itself, whose name comes from ‘light…