Luminar Technologies Stock Dimmed on Downgrade

Put volume is running at triple the intraday average

Deputy Editor
Mar 22, 2023 at 11:59 AM
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Luminar Technologies Inc (NASDAQ:LAZR) is down 15.8% at $6.51 at last glance and on the short sell restricted (SSR) list today, after a downgrade from Goldman Sachs to "sell" from "neutral" with a $5 price target. The firm cited margin risk and premium valuation, though also recognizing the company as one of the leaders in the light detection and ranging (lidar) industry.

Today's bear gap has LAZR dropping below several long-term moving averages converging just above the $7 level, including its 120-day trendline. On track for its fourth-straight day of losses, the equity is still up 32.9% year-to-date. 

Put traders have been quick to the draw today, with 70,000 puts exchanged so far, which is triple the volume typically seen at this point. The weekly 3/24 7-strike put is the most active contract, with new positions opening there. 

Of the 10 analysts in coverage, six carry a "strong buy" rating on Luminar stock, with four at a "hold." Plus, the 12-month consensus price target of $12.73 sits at a hefty 90% premium to current levels, leaving plenty of room for price-target cuts in the near future. 

It's also worth noting that while short interest has begun to slowly unwind, it still represents 28.5% of the stock's available float. It would take over five days to buy back these bearish bets, at LAZR's average pace of trading. 

 

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