nLIGHT’s stock drops 11% due to exit from industrial sector; Analysts predict $48 target possible

nLIGHT, Inc. (LASR) stock has seen a significant 11.1% drop to $55.94 due to the release of its fourth-quarter earnings report. Despite achieving record revenue of $261 million in 2025, up by 32%, investor confidence took a hit with the announcement of the company’s complete withdrawal from the industrial cutting and welding markets.

The decision to exit these low-margin sectors is expected to result in a revenue decline of approximately $25 million to $30 million in 2026. CEO Scott Keeney emphasized the importance of shifting focus towards a pure-play defense model for long-term sustainability. According to Keeney, the company aims to concentrate on core growth opportunities in directed energy, sensing, and advanced manufacturing by reallocating resources accordingly.

Even with the industrial market exit, the Aerospace & Defense (A&D) segment of nLIGHT witnessed a substantial revenue increase of $175 million in 2025, marking a 60% year-over-year growth fueled by the expansion of its high-power laser weapon modules.

Currently, the stock is trading at a premium after experiencing a striking 540% return over the past year. This places it above the consensus analyst price target, with a Street target price of $48.00, approximately 14% below the current stock price of $55.94, but high targets reaching $55.00.

To strengthen its financial position, nLIGHT raised over $190 million through an equity offering, providing over $0.25 billion to support its capacity expansion. CFO Joe Corso highlighted the company’s proactive approach in investing in infrastructure to meet the increasing demand in the defense sector, particularly in producing high-energy lasers more efficiently and at scale.

According to the TIKR Analyst Breakdown, nLIGHT is recognized as a pivotal innovator in defense technology, strategically positioning itself as a crucial player in the “Directed Energy” warfare landscape. The company’s successful transition into the high-energy laser market, particularly through the delivery of a 50-kilowatt module for the Army’s DE M-SHORAD program, underscores its growth potential.

With a robust vertical integration strategy, nLIGHT is capitalizing on the efficiency of its commercial engine in the defense sector, evident in the 87% year-over-year surge in A&D revenue in the fourth quarter alone. By establishing a new 50,000-square-foot facility in Colorado, the company is well-equipped to dominate the directed energy technology domain.

In conclusion, nLIGHT remains a promising player in defense technology, leveraging its laser expertise to secure lucrative government contracts. While facing a short-term valuation gap compared to its $48.00 target price, the company’s long-term outlook looks promising, supported by a substantial capital raise and a strategic move away from low-margin markets.