Can Strong Momentum in Directed Energy Boost nLIGHT's Revenue Growth?

LASR's directed energy push fuels A&D growth, with record revenues, major program wins and new contracts positioning it for sustained expansion.

nLIGHT’s LASR directed energy end market is becoming one of the key growth drivers. The directed energy end market was a key reason behind the strong performance of its Aerospace and Defense (A&D) business in 2025. A&D revenues rose 60% year over year to a record $175 million, and management said directed energy was one of the main contributors. The company believes it is well-positioned in this market because it offers products across the full stack, from laser chips and components to high-energy laser systems and full laser weapon modules.

Management also highlighted solid execution on major directed energy programs. nLIGHT continues to make progress on HELSI-2, a $171 million program to develop a 1-megawatt high-energy laser. Here, shipments tied to HELSI-2 were a significant driver of defense product revenues in 2025 and are expected to remain a substantial contributor in 2026. In the fourth quarter, nLIGHT also substantially completed its work on the Army’s DE M-SHORAD program and delivered a 50-kilowatt CBC high-energy laser and beam director to its partner for integration and test.

nLIGHT expects new directed energy prototype contracts to be awarded in the coming months across different power levels and configurations. In addition, the company began shipping to several new international customers in 2025, where the company sees a growing pipeline of global opportunities.

Management’s recent investments also show confidence in this opportunity. nLIGHT raised more than $190 million in additional capital, which will be used to build out a new 50,000-square-foot manufacturing facility in Colorado. The above-mentioned factors demonstrate directed energy 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 directed energy 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 60.3% year to date compared with the Electronics - Semiconductors industry’s growth of 2%.

nLIGHT YTD Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, nLIGHT trades at a forward price-to-sales ratio of 11.54X, higher than the industry’s average of 7.18X. 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).

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