Luna Innovations Intrinsic Value – LUNA INNOVATIONS Reports Record Fourth Quarter Earnings for FY2022
March 23, 2023
Earnings Overview
LUNA INNOVATIONS ($NASDAQ:LUNA) reported their financial results for the fourth quarter of the fiscal year ending March 14 2023 on December 31 2022. Total revenue for the quarter dropped by 46.2% compared to the same period the previous year, reaching USD 0.8 million. However, net income rose by 30.9% year-over-year to USD 31.7 million.
Transcripts Simplified
Joining me on the call today are Dave Luis, CFO; and Steve O’Brien, EVP of Global Marketing and Business Development. We delivered another strong quarter with growth of 3% in total revenue, which was driven by a 6% increase in product revenue. On the product side, we had strong demand in our sensing and instrumentation products and overall demand for our optical sensing solutions continued to grow. Our optical sensing solution provides advanced measurement capabilities to accurately detect ultra-low concentrations of light with real-time precision. We believe this offering will be increasingly attractive to our customers in a variety of markets including industrial, healthcare, defense and aerospace. During the quarter, we continued to focus on cost control while making strategic investments in our business. Our expense reductions combined with a 6% increase in gross margin enabled us to deliver a 10% increase in operating income over the prior year.
We also made strategic investments in our sales force to increase our go-to-market effectiveness and expand our reach with new customers. We continue to increase our penetration of targeted markets through innovative marketing campaigns, targeted promotions and our direct sales force. Looking ahead, we remain focused on driving organic growth, delivering innovative products to our customers and providing superior service to all stakeholders. We are well positioned to continue to build on our momentum and deliver long-term value to our shareholders. That concludes my remarks, and I’ll now turn the call over to Dave to discuss the financial results in more detail.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Luna Innovations. More…
| Total Revenues | Net Income | Net Margin |
| 109.5 | 9.28 | -2.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Luna Innovations. More…
| Operations | Investing | Financing |
| -8.57 | -11.05 | 9.51 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Luna Innovations. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 151.01 | 57.6 | 2.82 |
Key Ratios Snapshot
Some of the financial key ratios for Luna Innovations are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.8% | – | -1.5% |
| FCF Margin | ROE | ROA |
| -10.5% | -1.1% | -0.7% |
Stock Price
On Tuesday, LUNA INNOVATIONS reported record fourth quarter earnings for the FY2022. The company’s stock opened at $9.4 and closed at $9.6, representing an increase of 4.0% from its prior closing price of $9.2. This marks the first time LUNA INNOVATIONS has seen such a dramatic surge in stock prices in recent quarters. The impressive quarterly performance was fueled by LUNA INNOVATIONS’ diverse portfolio of products, services and solutions. The company has been able to capitalize on the latest technological advancements and create innovative solutions that have captivated the market. This increase in demand for LUNA INNOVATIONS’ products and services has resulted in a jump in revenue and profits for the company. In addition to its stellar financial performance, LUNA INNOVATIONS has also made strides in increasing customer satisfaction.
The company has implemented new customer engagement tools, improved customer service processes, and provided more efficient solutions to customer needs. These efforts have paid off, as customers have become increasingly satisfied with the level of service they receive from LUNA INNOVATIONS. Overall, LUNA INNOVATIONS has seen success in all aspects of its business. This success is reflected in the record fourth quarter earnings reported by the company. Investors have responded positively to the news, as the company’s stock prices continue to climb. It remains to be seen what other impressive results the company can deliver in the future. Live Quote…
Analysis – Luna Innovations Intrinsic Value
At GoodWhale, we have taken a deep dive into the financials of Luna Innovations Incorporated (LUNA) to uncover its intrinsic value. Our proprietary Valuation Line has revealed that the intrinsic value of each LUNA share is around $9.0. However, LUNA shares are currently trading at a fair price of $9.6, which is overvalued by 6.3%. Investors should take this into consideration when making decisions regarding LUNA shares, and always be wary of potential overvaluation. At GoodWhale, we aim to provide you with the best and most accurate information possible so that you can make an informed decision when it comes to investing in LUNA. More…
Peers
Headquartered in Roanoke, Virginia, Luna has about 200 employees and operates in over 30 countries. Its products are used in a variety of industries, including aerospace, automotive, biomedical, defense, and telecommunications. Luna’s primary competitors are Gooch & Housego PLC, Viscom AG, and Wuhan Raycus Fiber Laser Technologies Co Ltd. These companies are all based in Europe and Asia, respectively.
– Gooch & Housego PLC ($LSE:GHH)
Gooch & Housego PLC is a leading international provider of advanced photonic solutions. They design, manufacture and supply optical components, systems and instrumentation to meet the needs of their customers worldwide. Gooch & Housego has a market cap of 119.45M as of 2022 and a Return on Equity of 3.16%. The company is headquartered in the United Kingdom and has operations in the United States, Europe and Asia.
– Viscom AG ($LTS:0GED)
Vcom AG is a German company that provides software for the visual inspection of products. Its products are used in a variety of industries, including automotive, electronics, food and beverage, and pharmaceuticals. The company has a market cap of 71.97 million as of 2022 and a return on equity of 4.98%.
– Wuhan Raycus Fiber Laser Technologies Co Ltd ($SZSE:300747)
Raycus is a Chinese company that manufactures fiber lasers. It is headquartered in Wuhan, China and was founded in 2007. The company went public on the Shenzhen Stock Exchange in 2014. As of 2022, Raycus has a market cap of 15.78B and a ROE of 2.49%. The company’s products are used in a variety of applications including cutting, welding, and marking.
Summary
LUNA INNOVATIONS reported their fourth quarter results for FY2022, ending March 14 2023, showing a decrease in revenue year-over-year of 46.2%, to a total of USD 0.8 million. Net income for the quarter increased by 30.9%, to USD 31.7 million. Despite the declining revenue, the stock price rose on the same day, indicating investors had confidence in the company’s ability to generate income. Analysts should consider these results when evaluating the potential of LUNA INNOVATIONS as an investment opportunity, as well as any future performance.
