nLIGHT, Inc. (LASR) DCF Valuation & Fundamental Primer
nLIGHT, Inc. (LASR) currently trades at $38.09 with an enterprise value of $1.06B. Our proprietary institutional model rates nLIGHT, Inc. at 83/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 29.6% vs. historical growth of 15.0% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of nLIGHT, Inc. (LASR) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
nLIGHT, Inc. (LASR) 3-Scenario DCF Valuation Range
Stress-test LASR's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $38.09).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $24.90 -35% | $26.40 -31% | $28.15 -26% | $30.21 -21% | $32.70 -14% |
| 9.3% | $22.45 -41% | $23.63 -38% | $24.99 -34% | $26.57 -30% | $28.41 -25% |
| 10.0% | $20.44 -46% | $21.39 -44% | $22.47 -41% | $23.70 -38% | $25.12 -34% |
| 10.8% | $18.76 -51% | $19.54 -49% | $20.41 -46% | $21.40 -44% | $22.51 -41% |
| 11.5% | $17.34 -54% | $17.98 -53% | $18.70 -51% | $19.50 -49% | $20.40 -46% |
Institutional Software Quality Scorecard (83/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
High-quality software margins with healthy balanced growth and profitability
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 205% of EBIT driven by upfront annual collections
- Healthy unit economics: 74.7% gross margin
- Net cash positive: $50.8M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into LASR?
The current share price demands 29.6% 5-year CAGR (41.6% net of SBC & dilution)—a +14.6% acceleration over historical run-rate (15.0%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (11.3% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 41.6% 5-year revenue CAGR to justify $38.09/sh on a true per-share economic cash flow basis.
nLIGHT, Inc. (LASR) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $226.6M | $226.6M | $260.6M | $299.7M | $344.7M | $396.4M | $455.9M |
| Gross Profit | $169.3M | $169.3M | $194.7M | $223.9M | $257.5M | $296.1M | $340.5M |
| Operating Income (EBIT) | $22.7M | $22.7M | $26.1M | $30.0M | $34.5M | $39.6M | $45.6M |
| Stock-Based Compensation (SBC) | $25.6M | $25.6M | $29.5M | $33.9M | $39.0M | $44.8M | $51.5M |
| Unlevered Free Cash Flow (FCF) | $46.5M | $46.5M | $53.4M | $61.4M | $70.7M | $81.3M | $93.5M |
| SBC-Adjusted True Cash Flow | $20.9M | $20.9M | $24.0M | $27.6M | $31.7M | $36.5M | $41.9M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -14.6 + 0.53 × (Rule of 40) · R² = 62%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| nLIGHT, Inc. | LASR | $1.88B | $226.6M | 74.7% | 20.5% | 35.5% | 11.3% | 8.1× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 8.1× | $1.83B | $1.88B | $38.09 | 0.0% |
| -20% Multiple Compression | 6.5× | $1.46B | $1.52B | $30.68 | -20.0% |
| -35% Multiple Compression | 5.2× | $1.19B | $1.24B | $25.12 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.13B | $1.18B | $23.97 | -38.1% |
Frequently Asked Questions: nLIGHT, Inc. (LASR) Valuation
What is nLIGHT, Inc. (LASR)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, nLIGHT, Inc. (LASR) has a Base Case implied value of $22.47 per share (with a Bear Case of $11.22 and a Bull Case of $37.07), compared to its current price of $38.09. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is nLIGHT, Inc. (LASR)'s Rule of 40 score and Free Cash Flow margin?
nLIGHT, Inc. achieves a Rule of 40 score of 35.5%, combining a 15.0% revenue growth run-rate with a 20.5% TTM free cash flow margin on $226.6M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into LASR stock according to Reverse-DCF analysis?
At $38.09 per share (Enterprise Value of $1.83B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 29.6%, compared to nLIGHT, Inc.'s historical CAGR of 15.0%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does nLIGHT, Inc. compare to Software & Cloud Services software peers?
nLIGHT, Inc. (LASR) earns an institutional Software Quality Score of 83/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact nLIGHT, Inc. (LASR)'s valuation?
nLIGHT, Inc. recorded $25.6M in TTM stock-based compensation (11.3% of revenue). When treating SBC as a cash-equivalent compensation expense, nLIGHT, Inc.'s SBC-adjusted free cash flow yield is 1.1%, scoring 16/25 on our Shareholder Dilution Friction pillar.