With many Automakers, including Ford (F), GM (GM), BMW (BMWYY) and Honda (HMC), intensively looking to roll out autonomous and semi-autonomous vehicles. Little known companies that develop and produce an essential component of autonomous vehicles, called Lidar, are starting to get attention from investors who are in the know.
Experts are saying that Lidar sensors are about to become a mainstream car feature. Our research team has found one of the best opportunities for investing in what seems to be “the next big thing” for automakers. Right now may be the best time to take advantage of this opportunity.
Lidar stands for “light radar.” It emits lasers and measure distance by determining how quickly the lasers come back to their origin after hitting objects. According to Wired, “Because lidar sees in much greater detail than radar, it could make … cars capable enough to drive without that constant supervision.” That probably explains why lidar is now considered an essential component of autonomous vehicles and lidar stocks are getting attention.
Research firm Lucintel said lidar is “used in blind spot detection, adaptive cruise control, parking assistance, and pedestrian detection systems.” It predicted revenue of the “automotive detection and ranging sensors market” will have a compound annual growth rate of 17% between 2019 and 2025. Within the sector, the popularity of lidar is expanding more quickly than average, the firm stated.
Collective Growth Corp. (CGRO) is a special purpose acquisition company that plans to merge with Israel’s Innoviz Technologies, which develops lidar sensors. Among the start-up’s investors are two huge auto equipment companies, Magna (MGA) and Aptiv (APTV). Another investor is Softbank (SFTBY), a huge Japanese investment bank.
Innoviz agreed to sell its lidar to BMW for use in its 2021 SUV. Importantly, Innoviz recently announced that it released a cheaper lidar system more feasible for “mass market” automobiles. Indeed, the company “claims its technology is some of the most cost effective for automakers on the market,” according to Yahoo Finance.
In 2025, Innoviz predicts gross margin will reach 52%, with its operating margin hitting 31%. The SPAC provided $150 million in cash and raised $200 million from investors in the deal that gives th combined company a $1.4 billion equity value. This will make Innoviz one of the cheaper lidar plays. They expect the transaction to close in the first quarter of this year.
The combination of a top-notch customer, huge investors, affordable products and a relatively low valuation make Collective Growth/Innoviz (CGRO) one of the best lidar stocks to buy.
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