Luminar Technologies, Inc.

LAZR Details

Completed Business Combination with Gores Metropoulos: Luminar Technologies, Inc. (NASDAQ: LAZR) is a leading automotive lidar hardware and software technology company with offices in Palo Alto, Orlando, Colorado Springs, Detroit, and Munich. In December 2020, the company completed its business combination with a special purpose acquisition company, Gores Metropoulos. Following the completion of business combination, Gores Metropoulos changed its name to Luminar Technologies, Inc. and got listed on the Nasdaq under the new ticker symbol “LAZR”. As on 5 February 2021, the company’s market capitalization stood at ~$10.80 billion.

Redemption of Public Warrants: The company recently announced that it is going to redeem its 13,333,309 outstanding Public Warrants and the holders of these outstanding Public Warrants have until 5:00 p.m., New York City time, on March 5, 2021, to exercise their Public Warrants. It is expected that the redemption of Public Warrants will yield gross proceeds of up to $153.3 million, bringing total capital raised by LAZR since founding to approximately $1 billion.

Outlook: Due to new OEM deals and increased existing customer volume outlook, the company had increased its 2020 Order Book from $1 billion to approximately $1.3 billion. It is currently on-track for powering series production vehicles in 2022. The company expects its revenue to grow from $15 million in 2020 to $857 million in 2025, driven by development programs transitioning to series production programs or similar agreements.

5-Year Revenue Growth (Source: Company Reports)

Stock Recommendation: The stock of LAZR has provided a return of 228.24% in the last three months and is trading higher than the average 52-weeks price level band of $47.80 and $9.45. On the technical analysis front, the stock has a support level of ~$29.47 and resistance of ~$36.11. Considering the recently completed business combination with Gores Metropoulos, new OEM deals, increased existing customer volume outlook, expected proceeds from the redemption of Public warrants, and expected revenue growth over the next five-years, we give a “Buy” recommendation on the stock at the closing price of $33.35, up by 1.49% as on 5 February 2020.

LACR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Clover Health Investments, Corp.

CLOV Details

Completed Business Combination with Social Capital Hedosophia Holdings Corp. III: Clover Health Investments, Corp. (NASDAQ: CLOV) is an innovative technology company focused on improving health outcomes for America's seniors. On 7 January 2021, the company announced that it has completed its business combination with Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC), a publicly traded special purpose acquisition company. Following the business combination, the company’s stock began trading on NASDAQ on 8 January 2021, under the new ticker symbol “CLOV”. The business combination has provided significant capital for the Company to scale and improve health outcomes for seniors across the United States. As on 5 February 2021, the company’s market capitalization stood at ~$5.69 billion. For the nine months ended 30 September 2020, the company had reported total net loss of $20.15 million. As at 30 September 2020, the company had total assets of $828.68 million.

Outlook: CLOV is one of the fastest growing Medicare company in the US. It is currently in 34 countries, representing 3.1 million Medicare lives. With the capital from the recent business combination transaction, the company expect that it can scale its model more rapidly by accelerating its potential growth trajectory in 2023 and by adding millions of Medicare-eligible to its addressable population. In 2021, the company expects it to be in 108 countries, representing 4.4 million Medicare lives. In 2021, the company expect its gross premium revenue to be around $872 million. From 2020 to 2023, the company expects its revenue to grow at a CAGR of 37%.

Revenue Forecasts (Source: Company Reports)

Stock Recommendation: The company has recently received a letter from the Securities and Exchange Commission wherein SEC has informed that it is conducting an investigation in its recently completed business combination. In the last one month, the stock has corrected by 18.67% and is trading lower than the average 52-weeks price level band of $9.87 and $17.45. On a TTM basis, the stock is trading at a price to book multiple of 6.2x, higher than the industry median of 4.6x (Healthcare Equipment & Supplies). Considering the ongoing investigation of SEC in the business combination with Social Capital Hedosophia Holdings Corp. III, negative ROE, and history of incurring losses, we suggest investors to wait for more updates and give an “Avoid” rating on the stock at the closing price of $12.93, up by 5.72% as on 5 February 2021. However, investors with high risk-reward profiles may take the position in the stock.

CLOV Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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