nLIGHT’s LASR laser sensing end market is becoming one of the key growth drivers. Management stated that both directed energy and laser sensing delivered accelerated growth in 2025. nLIGHT’s laser sensing products are used in missile guidance, proximity detection, range finding and countermeasures. These products are already part of several long-running defense programs, and are expected to continue growing. This makes laser sensing an important contributor to the company’s defense business.
nLIGHT also pointed to solid program execution. In the third quarter of 2025, nLIGHT signed a new $50 million contract for an existing long-running missile program that uses one of its laser sensing products. The long-running missile program remains a key priority for the customer as part of the nation's munitions restocking efforts. In the fourth quarter of 2025, nLIGHT began low-rate initial production on a new classified sensing program.
Currently, nLIGHT's existing sensing programs are in full-rate production and will drive most of the near-term revenues. Further, new programs that are now in low-rate production are expected to scale over the next one to two years and become a larger part of the business. This provides both near-term visibility and a path for future growth.
nLIGHT’s strong performance on existing sensing programs and early success on classified work have increased both the number of opportunities and the size of its laser sensing pipeline. The above-mentioned factors demonstrate laser sensing becoming a major revenue growth driver for nLIGHT. The Zacks Consensus Estimate for 2026 and 2027 revenues indicates a year-over-year increase of 7% and 15%, respectively.
How Competitors Fare Against nLIGHT
nLIGHT’s push for laser sensing growth puts it against players like Coherent COHR and IPG Photonics IPGP.
IPG Photonics is known as a global leader in fiber lasers. Moreover, IPG Photonics has been actively expanding into defense applications, such as high-energy lasers for counter-drone and missile defense.
Meanwhile, Coherent remains focused on photonics, optics and laser systems. Coherent is also actively engaged in defense laser opportunities through U.S. DoD collaborations and systems development.
nLIGHT’s Price Performance, Valuation and Estimates
Shares of nLIGHT have rallied 67.3% year to date compared with the Electronics - Semiconductors industry’s growth of 11.5%.
nLIGHT YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, nLIGHT trades at a forward price-to-sales ratio of 12.02X, higher than the industry’s average of 7.82X. The Zacks Value Score of F also suggests that LASR stock is overvalued.
nLIGHT Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for nLIGHT’s 2026 and 2027 earnings implies year-over-year growth of 45.8% and 58.7%, respectively. The estimates for 2026 and 2027 earnings have both been revised downward over the past 30 days.
Image Source: Zacks Investment Research
nLIGHT currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Coherent Corp. (COHR): Free Stock Analysis Report
IPG Photonics Corporation (IPGP): Free Stock Analysis Report
nLight (LASR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).