In the Earnings Spotlight: Cepton (CPTN)

by | Mar 10, 2022

If you like juice, fine. If you like fundamentals, LiDAR is still a next-year story

Key points ahead of the quarter

CPTN reports Q4 earnings today aftermarket. Cepton appears to have the relations in pace to make it into the winner’s circle. LiDAR maker Cepton (CPTN) reports Q4 earnings today aftermarket. Numbers really don’t matter. What does: insight into commercial production with automakers and insight into whether Cepton will be one of 2-3 winners in this highly competitive space.

CPTN: After a quick juicing, CPTN shares holding fairly steady since deSPAC. Cepton completed its   deSPAC last month via sponsor Growth Capital Acquisition Corp. (GCAC).

CPTN endured the famed low-float DeSPAC squeeze last month

Red flags: High redemptions / low float make this a short squeeze. A whopping 90% redemptions results in CPTN having a low float of ~1.6M shares. Short interest is currently over 25% of public float. These dynamics make CPTN ripe for another short squeeze, which is what appears to have occurred in mid-February, when the shares hit a momentary ~$80. Shares are currently holding in at just under $8.

Keep an eye out. Cepton raised a $59.5 million PIPE as part of the financing, and those 5.95M shares have been on file to be registered since late February. Shares should likely add to the public float sooner rather than later, potentially adding some downward pressure.

Source: Boardroom Alpha

Cepton could make it into the winner’s circle, eventually. Cepton claims to have won the largest known ADAS LiDAR series production award in the industry to date (based on the number of vehicle models awarded), by a leading global top five automotive OEM. The company is engaged with other top-ten OEMs. Speculation has centered around Ford (F) as the potential customer– given the disclosure by Cepton that the auto customer is Detroit-based, as well as public comments from Ford citing its relationship with Cepton. That said, the question is timing. Critics say that both the form factor and price need to come down materially before carmakers adopt the technology at scale.

…but most LiDAR companies are at least a year away from full-scale volume production. CPTN’s growth projections call for $15 million in revenue this year, ramping to $250 million in 2024 (240,000 sensor units). Like most emerging tech companies, Cepton doesn’t project an adjusted profit until 2024, when it anticipates that a considerable portion of its revenue will come from automotive sensors used in ADAS. In the near term (before auto shipments start sometime next year), Cepton anticipates that most of its revenue will come from LiDAR sensors used in Internet of Things (IoT) applications.

On the sidelines for now. We’re absolutely not ruling CPTN out in the lidar race. We think there is a real technology edge here. That said, given the squeeze set-up going into the print, we don’t feel the need to play with fire. Sorry for the mixed metaphor. We’ll wait for the fast-money to move out of the name, which gives us a quarter or more to hear more about what’s going on at Cepton.

We Recently Sat Down with CPTN CEO Dr. Jun Pei

CEO Dr. Jun Pei joined the Know Who Drives Return podcast last month. You can watch below or read the full analysis here.

<a href="https://www.boardroomalpha.com/author/joanna/" target="_self">Joanna Makris</a>

Joanna Makris

Joanna has been analyzing and investing in emerging technologies for over two decades, having led the Technology, Media, and Telecom research at several global investment banks, including Mizuho Securities and Canaccord Genuity. Navigating stock market volatility since it all began in 2000. Banjo player, artist, and frittata-maker.

Know Who Drives Return

Objective, data-driven assessments for every public company director and officer.

SPAC Analytics & Database

Comprehensive research and analytics on every SPAC, sponsor, and deal. Real-time alerts, yields, red flags, filings, investors, and much more. API access to institutional grade SPAC database.

Monthly SPAC Review

SPAC Market Review – April 2022

The market is a mess right now. A hawkish Fed and even more cautious SEC are slowing deals….but may raise the bar for more quality SPACs down the line.

SPAC Market Review – March 2022

Despite increased scrutiny and apparent investor fatigue, deals are getting done and SPACs remain an attractive path to the public markets.

SPAC Research & Analysis

Starting the Week with 2 DAs

Starting the week off with 2 DAs– oil & gas and battery tech. And the rest of the day’s news in SPACs.

Comera Gets Approval, with Over 98% Redemptions

Squeeze alert: OTRA approves its merger with Comera Life Sciences, albeit with some of highest redemptions we’ve seen in a while (98.4%). And the rest of the day’s news in SPACs.

Know Who Drives Return Podcast

NYC Pension Funds Want Amazon Accountable for Human Capital

AMZN stock is performing, but are warehouse workers paying the price? We talk to Assistant NYC Comptroller Michael Garland on the NYC Pension Funds’ move to unseat two Amazon board members responsible for human capital management at the tech giant.

Boardroom Alpha Daily Read

Board blow-up at Redbox Entertainment. Mill Road Capital Pushing for a Sale of Big Lots. Happy Earth Day! A perfect time to tune into our latest ESG podcast.

Disclaimer

The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but Boardroom Alpha cannot guarantee its accuracy and completeness, and that of the opinions based thereon. 

This report contains opinions and is provided for informational purposes only – it does not constitute investment, legal or tax advice. You should not rely solely upon the research herein for purposes of transacting securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a qualified securities professional before you make any investment.  

None of the information contained in this report constitutes, or is intended to constitute a recommendation by Boardroom Alpha of any particular security or trading strategy or a determination by BA that any security or trading strategy is suitable for any specific person. To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.  

No representation or warranty, expressed or implied, is made on behalf of Boardroom Alpha as to the accuracy or completeness of the information contained herein. Boardroom Alpha does not accept any liability for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on all or any part of this research and any liability is expressly disclaimed.