nLight Stock To $37?

nLight (LASR) stock has fallen 16% during the past day, and is currently trading at $54.00. Our multi-factor assessment suggests that it may be time to sell LASR stock. We have, overall, a pessimistic view of the stock, and a price of $37 may not be out of reach. We believe there is a near-equal mix of good and bad in LASR stock given its overall moderate operating performance and financial condition. But keeping in mind its very high valuation, we think that the stock is unattractive.

Below is our assessment:

Portfolio beats stock-picking every time. Consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.

Let’s get into details of each of the assessed factors but before that, for quick background: With $2.8 Bil in market cap, nLight provides semiconductor and fiber lasers, fiber amplifiers, and beam control systems for industrial, microfabrication, aerospace, defense, and high-energy directed energy applications.

[1] Valuation Looks Very High

This table highlights how LASR is valued vs broader market. For more details see: LASR Valuation Ratios

[2] Growth Is Strong

• nLight has seen its top line grow at an average rate of 4.3% over the last 3 years
• Its revenues have grown 32% from $199 Mil to $261 Mil in the last 12 months
• Also, its quarterly revenues grew 71.3% to $81 Mil in the most recent quarter from $47 Mil a year ago.

This table highlights how LASR is growing vs broader market. For more details see: LASR Revenue Comparison

[3] Profitability Appears Very Weak

• LASR last 12 month operating income was $-24 Mil representing operating margin of -9.3%
• With cash flow margin of 8.2%, it generated nearly $21 Mil in operating cash flow over this period
• For the same period, LASR generated nearly $-23 Mil in net income, suggesting net margin of about -9.0%

This table highlights how LASR profitability vs broader market. For more details see: LASR Operating Income Comparison

[4] Financial Stability Looks Very Strong

• LASR Debt was $36 Mil at the end of the most recent quarter, while its current Market Cap is $2.8 Bil. This implies Debt-to-Equity Ratio of 1.3%
• LASR Cash (including cash equivalents) makes up $134 Mil of $315 Mil in total Assets. This yields a Cash-to-Assets Ratio of 42.4%

[5] Downturn Resilience Is Weak

LASR has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• LASR stock fell 81.7% from a high of $44.92 on 19 February 2021 to $8.23 on 26 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 20 January 2026
• Since then, the stock increased to a high of $71.75 on 25 March 2026 , and currently trades at $54.00

 
2020 Covid Pandemic

• LASR stock fell 56.6% from a high of $21.65 on 16 January 2020 to $9.39 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 11 May 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read LASR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.