nLIGHT shares tumble after $175M stock offering priced at discount
Laser technology company raises capital at 12% discount to prior close, diluting existing shareholders by 7.8%
nLIGHT shares dropped in pre-market trading on Wednesday after the laser technology company announced a $175 million stock offering priced at a deep discount to Tuesday's closing price.
The Vancouver, Washington-based company priced 3.98 million shares at $44.00 each, representing a 12% discount to the stock's $49.98 close. The offering adds approximately 7.8% to the company's outstanding share count, diluting existing shareholders as new shares enter the market at a reduced valuation.
The secondary offering follows a remarkable 354% surge in nLIGHT's stock over the past 12 months, with shares recently trading near their 52-week high of $50.78. The steep discount on the offering price suggests the company and its underwriters sought to ensure sufficient demand despite concerns about dilution.
nLIGHT intends to use the net proceeds for working capital, capital expenditures, and general corporate purposes, according to the regulatory filing. The capital raise comes as the company expands its manufacturing capacity in Longmont, Colorado, to support high-energy laser production for government agencies.
"nLIGHT is positioned to capitalize on increasing demand for cutting-edge laser solutions driven by ongoing advancements within the photonics sector," the company said, citing its focus on industrial applications, microfabrication, and aerospace and defense markets.
Despite the pre-market decline following the offering announcement, analyst sentiment on nLIGHT remains positive. The stock carries a consensus rating of "Moderate Buy" from 10 analysts, with price targets ranging from $39 to $60. Stifel recently initiated coverage with a Buy rating and $60 price target, while Raymond James maintains a Strong Buy rating with a $50 target.
Roth Capital lifted its price target from $44 to $55, and Needham & Company raised its target from $39 to $48, both maintaining Buy ratings. The average analyst target price stands at $47.43, according to market data.
Financially, nLIGHT has yet to achieve profitability, reporting a loss per share of $0.86 over the trailing 12 months with a negative profit margin of 19.1%. However, quarterly revenue growth reached 18.9% year-over-year, and analysts predict the company will turn profitable this year. The company reported preliminary fourth-quarter 2025 revenue figures that surpassed previous guidance, indicating momentum in its core business.
The offering's underwriting syndicate includes Stifel, Baird, William Blair, and Raymond James as joint lead book-running managers, with Cantor serving as book-running manager and Needham & Company as co-manager. The transaction is expected to close around February 5.
Institutional investors hold 88.3% of nLIGHT's outstanding shares, while insiders own approximately 5.9%. The stock's beta of 2.33 indicates high volatility compared to the broader market, consistent with its sharp price swings over the past year.
The discount pricing of the offering reflects a common challenge for companies conducting secondary offerings after significant stock appreciation. While the capital infusion provides financial flexibility for growth initiatives, the immediate market reaction highlights investor sensitivity to dilution, particularly when shares are sold below recent trading levels.