Velodyne Falls. Baird Says Self-Driving Car Stock Could Rise 50%

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A Velodyne Lidar sensor on a self-driving Toyota Prius.

Andrey Rudakov/Bloomberg

A new autonomous-driving stock picked up its first Buy rating after a rocky trading debut.

Velodyne Lida

r announced plans to merge with the special-purpose acquisition company Graf in early July. The deal closed this week. Shares plummeted 24.5% to close at $18.69 on Wednesday, the stock’s first day of trading under its new symbol, VLDR.

Investors might have overreacted. Baird analyst Tristan Gerra launched coverage of the company Thursday, rating shares the equivalent of Buy. His target for the stock price is $28, about 50% higher than recent trading levels.

Lidar is, essentially, laser-based radar and part of the suite of sensors auto makers use to achieve advanced safety features, as well as create self-driving cars. Gerra expects sales to grow 55% a year on average for the next four years, hitting $684 million by 2024.

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