Company Overview - nLIGHT, Inc. (NASDAQ: LASR) specializes in manufacturing semiconductor and fiber lasers for industrial, aerospace, and defense applications, as well as high-energy laser systems and components for precision and directed energy uses [2]. Financial Performance - nLIGHT has not been profitable for the last three years, with sales peaking at $270 million in 2021 and declining to under $200 million last year [1][2]. - The company's stock reached an all-time low earlier this year, reflecting its ongoing financial struggles [1]. Market Potential - Despite its financial challenges, there is a perception that the defense department is willing to invest in nLIGHT's technology, which may be a significant factor for potential investors [1]. - There is a belief that certain AI stocks may offer greater upside potential and carry less downside risk compared to nLIGHT [3].

Group 1 - Meridian Contrarian Fund reported a 6.72% net return in Q3 2025, underperforming the Russell 2500 Index which returned 9.00% and the Russell 2500 Value Index which returned 8.18% [1] - The fund's performance was influenced by record high equities driven by technology gains and falling bond yields, alongside easing tariff rhetoric and renewed AI infrastructure investments [1] - The U.S. Federal Reserve lowered rates by 25 basis points in mid-September, contributing to the favorable market conditions [1] Group 2 - NLIGHT, Inc. (NASDAQ:LASR) is highlighted as a key investment, with a one-month return of 8.77% and a 52-week gain of 218.54% [2] - As of November 28, 2025, NLIGHT, Inc. had a market capitalization of $1.789 billion and closed at $35.23 per share [2] - The company focuses on high-power lasers for medical, industrial, and defense markets, with a strategic shift towards laser defense applications [3] Group 3 - NLIGHT, Inc. reported Q3 2025 revenue of $67 million, reflecting a 19% year-over-year growth [4] - The number of hedge funds holding NLIGHT, Inc. increased from 30 to 34 in the third quarter [4] - Despite the potential of NLIGHT, certain AI stocks are considered to offer greater upside potential with less downside risk [4]

Core Insights - nLIGHT reported Q3 CY2025 results that exceeded Wall Street's revenue expectations, with sales increasing by 18.9% year-on-year to $66.74 million, surpassing analyst estimates of $63.33 million by 5.4% [1][7] - The company provided a strong revenue guidance for Q4 CY2025 at $75 million at the midpoint, which is 22.8% above analysts' expectations of $61.07 million [1][7] - nLIGHT's non-GAAP profit was $0.08 per share, significantly above the consensus estimate of $0.02, indicating strong operational performance [1][7] Company Overview - nLIGHT, founded by Scott Keeney, specializes in semiconductor and fiber lasers for industrial, aerospace & defense, and medical sectors [4] Revenue Growth - Over the last five years, nLIGHT's sales grew at a sluggish compounded annual growth rate of 2.6%, which is considered below industry standards [5] - The company's annualized revenue growth of 2.9% over the last two years aligns with its five-year trend, suggesting consistently weak demand [6] Financial Performance - Adjusted EBITDA for Q3 CY2025 was $7.11 million, significantly beating analyst estimates of $3.30 million, with a margin of 10.7% [7] - Operating margin improved to -10.9%, up from -21% in the same quarter last year, indicating operational improvements [7] - Free cash flow margin decreased to 3.7%, down from 29.6% in the same quarter last year [7] Segment Analysis - nLIGHT's revenue is primarily derived from two segments: Laser Products (71.3% of revenue) and Advanced Developments (28.7% of revenue) [8] - Laser Products revenue has averaged a decline of 4.1% year-on-year over the last two years, while Advanced Developments revenue has averaged a growth of 19.1% [8]