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On Friday, Benchmark analysts adjusted their outlook on Nlight (NASDAQ:LASR), reducing the price target from $17.00 to $15.00 while still maintaining a Speculative Buy rating on the company’s shares. The stock, currently trading at $9.17 and near its 52-week low, has seen eight analysts revise their earnings expectations downward according to InvestingPro data. The price target revision follows Nlight’s report of a non-GAAP net loss that exceeded expectations.
The company’s lower-than-anticipated revenue for the fourth quarter of 2024 was attributed to a combination of factors. These included persistent weakness in its industrial markets, execution challenges within its microfabrication business, and the timing of defense product deliveries. With a gross profit margin of just 20.53% and a year-over-year revenue decline of 5.43%, the company faces significant operational challenges. Additionally, Nlight’s Q4 results were impacted by a $6 million inventory reserve charge from the Industrial segment. Want deeper insights? InvestingPro offers exclusive analysis and 11 additional key insights for LASR.
Benchmark’s analysts anticipate that sales in the March quarter will be similar to those in the previous quarter, albeit with some improvements in margins. They also forecast a 25% year-over-year growth in Aerospace/Defense sales for 2025. The analysts’ continued Speculative Buy rating is buoyed by the potential for equipment orders in the second half of 2026.
The firm’s guidance suggests a steady sales outlook in the near term, with the expectation of margin enhancements. The growth projection for the Aerospace/Defense segment is a key factor in the analysts’ ongoing positive stance on Nlight stock. Despite the current challenges, Benchmark’s revised price target reflects their belief in the company’s potential for recovery and growth in the coming periods.
In other recent news, nLIGHT Inc . reported its fourth-quarter 2024 earnings, which fell significantly short of analyst expectations. The company posted an earnings per share (EPS) of -$0.30, well below the forecasted -$0.06, and revenue of $47.38 million, missing the projected $59.97 million. The Aerospace and Defense (A&D) segment, however, showed resilience with a 20% year-over-year growth, bringing in a record $110 million and accounting for approximately 60% of total sales. Despite the challenges in the commercial markets, which saw a 25% revenue decline, nLIGHT’s management remains optimistic about the A&D sector, forecasting at least 25% growth for 2025.
Analysts have reacted to these developments with mixed adjustments. Craig-Hallum analyst Greg Palm reduced the price target for nLIGHT to $11.00 from $12.00, maintaining a Hold rating due to the company’s reliance on declining commercial markets. Meanwhile, Cantor Fitzgerald analyst Troy Jensen adjusted the price target to $14.00 from $15.00 but kept an Overweight rating, citing the company’s strong financial position with $101 million in cash and no debt. Both analysts emphasized the potential growth in the A&D segment as a key driver for the company’s future performance.
nLIGHT’s financial results highlight ongoing challenges, such as a sharp decline in gross margin to 2% from 19% the previous year, primarily due to non-routine charges and declining industrial markets. The company remains focused on expanding its defense and directed energy markets, supported by a robust backlog and strategic initiatives. These recent developments underscore the company’s strategic focus on its A&D segment, which is expected to continue driving growth amid challenges in other sectors.
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