Luna Innovations Incorporated (LUNA) | Investment Case

1. Company Snapshot

1.a. Company Description

Luna Innovations Incorporated develops, manufactures, and markets fiber optic test, measurement, and control products worldwide.The company offers optical test and measurement products, which include optical vector analyzer, optical backscatter reflectometers, and the Phoenix family of tunable lasers; and Hyperion sensing solution that enables full-spectrum data acquisition and flexible peak detect algorithms of fiber-bragg gratings (FBGs), long period FBGs, and fabry-perot sensors with low-latency access to data for closed loop feedback applications.It also provides polarization control products, including components, modules, and instruments to measure, manage, and control polarization and group delay in fiber optic networks; tunable lasers; single frequency lasers; temperature and strain sensing products; ODiSI sensing solution, which provides distributed strain and temperature measurements; and Terametrix terahertz gauging and imaging products that provide precise single and multi-layer thickness, density, basis weight, and caliper thickness measurements, as well as distributed acoustic sensing intellectual property and products.

The company primarily markets its fiber optic test, measurement, and control products to telecommunications companies, defense agencies, government system integrators, researchers, original equipment manufacturers, distributors, testing labs, and strategic partners directly, as well as through manufacturer representative organizations, partner and distribution channels, technical sales engineers, value added resellers, and independent sales representatives.Luna Innovations Incorporated was incorporated in 1990 and is headquartered in Roanoke, Virginia.

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1.b. Last Insights on LUNA

Luna Innovations Incorporated's recent performance has been negatively impacted by ongoing litigation and potential claims against the company. The firm's securities have been under investigation by Bronstein, Gewirtz & Grossman, LLC, which is examining potential claims on behalf of purchasers of Luna securities prior to May 16, 2022. This ongoing investigation has likely contributed to market uncertainty and volatility.

1.c. Company Highlights

Last Price	1.4
Change Percentage	-6.04%
Open	1.4
Previous Close	1.49
Market Cap ( Millions)	47
Volume	19414
Year High	2.47
Year Low	0.22
M A 50	1.4
M A 200	0.9

FCF Yield	-24.27%
Dividend Yield	0.00%
ROE	10.58%
Debt / Equity	30.32%
Net Debt / EBIDTA	586.09%
Price To Book	0.49
Price Earnings Ratio	4.92
Price To FCF	-4.12
Price To sales	0.43
EV / EBITDA	18.32

2. Transcript Summary

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3. NewsRoom

Halper Sadeh LLC Encourages Luna Innovations Incorporated Shareholders to Contact the Firm to Discuss Their Rights

Oct -24

Source: businesswire.com

EDUARDO LUNA APPOINTED LEAD DIRECTOR OF VIZSLA SILVER

Sep -17

Source: prnewswire.com

Bronstein, Gewirtz & Grossman, LLC Encourages Luna Innovations Incorporated (LUNA) Shareholders to Inquire about Securities Investigation

Jun -15

Source: accessnewswire.com

Bronstein, Gewirtz & Grossman, LLC Is Investigating Luna Innovations Incorporated (LUNA) And Encourages Shareholders to Connect

Jun -12

Source: accessnewswire.com

Bronstein, Gewirtz & Grossman, LLC Initiates an Investigation into Allegations Against Luna Innovations Incorporated (LUNA) And Encourages Shareholders to Reach Out

Jun -10

Source: accessnewswire.com

Bronstein, Gewirtz & Grossman, LLC Announces an Investigation Against Luna Innovations Incorporated (LUNA) and Encourages Shareholders to Learn More About the Investigation

Jun -08

Source: accessnewswire.com

Bronstein, Gewirtz & Grossman, LLC Encourages Luna Innovations Incorporated (LUNA) Stockholders to Inquire about Securities Investigation

Jun -05

Source: accessnewswire.com

Bronstein, Gewirtz & Grossman, LLC Announces an Investigation Against Luna Innovations Incorporated (LUNA) and Encourages Investors to Learn More About the Investigation

Jun -03

Source: accessnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Test, Measurement and Sensing Systems

Expected Growth: 10.2%

Growing demand for advanced fiber optic-based solutions in industries such as aerospace, automotive, and healthcare drives the market growth. Increasing adoption of IoT and Industry 4.0 technologies also fuels the demand for sensing, measurement, and testing solutions.

Technology Development

Expected Growth: 10.2%

Growing demand for industrial automation and healthcare advancements drive the need for innovative sensing and imaging technologies, fueling Luna Innovations' growth.

Other

Expected Growth: 10.2%

Growing demand for fiber optic sensing and terrestrial sensing in industries such as oil and gas, aerospace, and infrastructure drives growth in Luna Innovations' 'Other' segment. Increasing adoption of IoT and 5G technologies also fuels demand for these products and services.

7. Detailed Products

Optical Sensing Products

Luna Innovations' optical sensing products provide precise measurements of physical parameters such as temperature, pressure, and vibration in various industries including aerospace, automotive, and energy.

Tunable Lasers

Luna Innovations' tunable lasers offer high-precision wavelength control and are used in various applications including spectroscopy, sensing, and material processing.

Fiber Optic Sensing Systems

Luna Innovations' fiber optic sensing systems provide distributed sensing capabilities for monitoring temperature, strain, and other physical parameters in various industries including oil and gas, aerospace, and infrastructure.

Test and Measurement Products

Luna Innovations' test and measurement products offer high-precision measurement capabilities for various industries including aerospace, automotive, and telecommunications.

Silicon Photonics

Luna Innovations' silicon photonics technology enables the development of high-speed, low-power optical interconnects for data centers, high-performance computing, and other applications.

8. Luna Innovations Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Luna Innovations Incorporated faces moderate threat from substitutes, as there are limited alternatives to its fiber optic sensing products.

Bargaining Power Of Customers

The company's customers have limited bargaining power due to the specialized nature of its products and services.

Bargaining Power Of Suppliers

Luna Innovations Incorporated's suppliers have moderate bargaining power, as the company relies on a few key suppliers for its raw materials.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the fiber optic sensing industry, including significant capital requirements and technical expertise.

Intensity Of Rivalry

The fiber optic sensing industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.23%
Debt Cost	3.95%
Equity Weight	76.77%
Equity Cost	10.94%
WACC	9.32%
Leverage	30.27%

11. Quality Control: Luna Innovations Incorporated passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Satellogic

A-Score: 5.0/10

Value: 8.0

Growth: 4.2

Quality: 7.2

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

1-Year Total Return ->

Kopin

A-Score: 4.5/10

Value: 8.0

Growth: 3.1

Quality: 4.6

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

KULR Technology

A-Score: 4.3/10

Value: 7.4

Growth: 4.3

Quality: 4.4

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

Focus Universal

A-Score: 3.6/10

Value: 6.0

Growth: 2.0

Quality: 3.6

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

Luna Innovations

A-Score: 3.2/10

Value: 7.8

Growth: 3.7

Quality: 6.0

Yield: 0.0

Momentum: 1.5

Volatility: 0.0

1-Year Total Return ->

MicroVision

A-Score: 2.8/10

Value: 6.4

Growth: 2.3

Quality: 3.0

Yield: 0.0

Momentum: 4.0

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.91%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.32%

Luna Innovations Incorporated - US5503511009

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on LUNA

1.c. Company Highlights

Weak Momentum

Lower Growth

Medium Volatility

Earnings Miss

More Volatile

Earnings Beats

Lower Quality

Stable Momentum

Average Quality

Average Growth

Expensive

Cheaper

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Test, Measurement and Sensing Systems

Expected Growth: 10.2%

Technology Development

Expected Growth: 10.2%

Other

Expected Growth: 10.2%

7. Detailed Products

Optical Sensing Products

Tunable Lasers

Fiber Optic Sensing Systems

Test and Measurement Products

Silicon Photonics

8. Luna Innovations Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Luna Innovations Incorporated passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.4$

Current Price

1.4$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA