Luna in the Spotlight: Analyst Initiates Coverage with High Hopes for Revenue and EPS Growth

Needham analyst Alex Henderson initiated coverage on Luna Innovations Inc LUNA at a Buy rating with a price target of $10.
The analyst believes in LUNA's strategy of building a robust diagnostics business around fiber technologies.
Henderson cites LUNA's focus on leveraging technology advantages and new technology additions via bolt-on acquisitions as a growth driver.
The analyst expects the company's OBR and Hyperion Products to sustain over 20% growth off a $15 million base led by strong customer wins, including Lockheed Martin Corp LMT and Airbus SE EADSF.
Henderson anticipates LUNA's collaboration with Intuitive Surgical Inc ISRG to shield it from competitive pressure and recent add-on contracts to drive over 20% sustained growth.
Moreover, the analyst is optimistic about new plants addition for LUNA's product for EV batteries and expects the line to exit 2023 at a $30 million run rate, driving the growth of over 50%.
The company could generate revenue growth of 15%-25%, with a strong margin expansion in the near term, the analyst writes.
He further estimates revenues of $125 million in 2023, $142.7 million in 2024, and $163.7 million in 2025 and anticipates EPS of $0.28 in 2023, $0.35 in 2024, and $0.50 in 2025.
Price Action: LUNA shares are trading higher by 4.23% at $8.50 on the last check Monday.

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