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Luna Innovations Incorporated (LUNA) fair value: what the stock is really worth

As of Sep 17, 2026: fair value of Luna Innovations Incorporated $2.38, price $1.34, upside +77.6%, quality 38 out of 100. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.

  1. Fair value above price? Yes
  2. Good quality? No
  3. Add to watchlist

Technology · US · ISIN US5503511009

LI Luna Innovations Incorporated logo Some data Sep 23, 2026

Luna Innovations Incorporated

LUNA · US

Cheap, value-trap riskThe stock looks deeply undervalued, but low quality raises value-trap risk.

✓Fair value $2.38 · Strongly undervalued (+78%)
!Quality 38/100
!Mixed Growth (revenue 5y +22.1 %/yr)
!Loss-making · -1.8% net margin (TTM)
!Low debt · negative free cash flow
!Mixed vs. peers (6/12)
!Narrow moat 18/100
!Evidence only medium, so the estimate is less certain
!Weak on future: 27 out of 100
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What runs behind every stock

26 valuation models 8 families, DCF to NCAV 37 quality factors margins, balance sheet, cashflow, debt 6 AI factors moat, what no ratio measures 2,000+ data points verified, per stock, median

69 individual criteria per stock, every one traceable See the method →

Price vs Fair Value

$12.79 $0.3000 Fair Value $2.38 Jun 2021 Sep 2026

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Sep 23, 2026.

How to read this chart

60‑month range $0.3000 – $12.79 · fair‑value band $1.62 – $3.13 · the $1.34 price screens below the $2.38 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Sep 23, 2026.

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Company profile

Luna Innovations Incorporated provides fiber optic test, measurement, and control products worldwide.

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Luna Innovations Incorporated provides fiber optic test, measurement, and control products worldwide. The company offers test and measurement equipment for fiber optic components and sub-assemblies; polarization control products, including components, modules, and instruments to measure, manage, and control polarization and group delay in fiber optic networks; tunable lasers; and single frequency lasers. It also provides ODiSI sensing solution, which provides distributed strain and temperature measurements; distributed temperature sensing system; hyperion sensing products; Terahertz Sensing Systems that provide precise single and multi-layer thickness, density, basis weight, and caliper thickness measurements; and distributed acoustic sensing products. The company markets its products to telecommunications companies, defense agencies, government system integrators, researchers, original equipment manufacturers, distributors, testing labs, and strategic partners directly, as well as through manufacturer representative organizations, partner and distribution channels, technical sales engineers, value added resellers, and independent sales representatives. Luna Innovations Incorporated was incorporated in 1990 and is headquartered in Roanoke, Virginia.

Stock analysis

Luna Innovations Incorporated (LUNA) currently trades at $1.34, while our model-based Fair Value estimate is $2.38, implying the stock looks roughly 43.7% undervalued today.

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Valuation

Bull case: the Multiples group reads highest at a median of $2.59 per share, and 2 of the 5 models we run sit above the $1.34 price.

Bear case: the DCF Models group reads lowest at $0.7200, and 3 of the 5 models stay below the price. Evidence for this calculation is medium.

Scenario range: $1.62 (bear) to $3.13 (bull), the price of $1.34 sits below it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.

Quality & growth

The Quality Score stands at 38/100 (below-average quality), in the Technology sector.

Mixed Growth: Revenue is growing, but margins or cash flow do not fully confirm the trend.

Luna Innovations Incorporated reported revenue of $117M in FY2023 versus $70.5M in FY2019, a compound +13.4%/yr. Reported net income was −$2.1M in FY2023.

Key figures

Market cap $52.0M · P/S ratio 0.45 · EPS (TTM) $−0.0300 · Dividend yield 4.9% · Net margin −1.8% · Return on equity −1.2% · Return on assets (EBIT) 0.3% · Operating margin 3.8%.

Competitive moat

Our AI-assisted moat analysis scores the competitive advantage at 32 out of 100 (low confidence).

What moves the price

The share trades about 23% below its 52-week high and 54% above its 52-week low, currently above its 200-day average.

For context, the median of 10 Technology peers we cover trades at −34% fair-value upside, at 78%, LUNA screens cheaper than that median.

Fair Value models

Bear $1.62 Fair Value $2.38 Bull $3.13
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above is their evidence-weighted blend, not the output of a single model. Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence ⓘEvidence = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Highest evidence
Owner Earnings $0.3000 $0.7200 $1.31 72
Gordon GGM $0.5100 $0.8500 $1.11 68
DDM Multi-Stage $0.5100 $0.8100 $0.9200 67
All 5 models by family
DCF Models
Owner Earnings $0.3000 $0.7200 $1.31 72
Dividend Discount
Gordon GGM $0.5100 $0.8500 $1.11 68
DDM Multi-Stage $0.5100 $0.8100 $0.9200 67
Multiples
EV/EBITDA $1.84 $2.59 $3.35 67
Asset-Based
NCAV (Graham) $1.35 $1.80 $2.69 54

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Quality Score breakdown

Overall quality 38/100

Of which business quality 41 · Market factors (momentum, volatility) 46

Profitability 33
Margins and returns on capital today
Quality Growth 30
Are margins and returns improving?
Cashflow 33
Earnings quality: real cash, not paper profit
Fin. Strength 46
Balance sheet, leverage, solvency risk
Investment 47
Disciplined investing over empire-building
Low Volatility 0
Calm price path (market factor)
Momentum 64
Price trend over the last 3–12 months (market factor)
52W Momentum 66
Distance to the 52-week high (market factor)
Net Issuance 63
Share count: buybacks or dilution?

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Revenue & earnings trend

Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card. 36/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Revenue growth 1 year
+6.5%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+25.4%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+22.1%
Revenue growth 22 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+13.1%
What shareholders gained per year (last 5 years) (mathematically smoothed) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Smoothed = median of all growth paths between the years of the window (trend line on the logarithm of earnings per share): a single extreme year cannot distort the rate. The reported figure stays in the tooltip.
−37.5%
Earnings growth per share plus dividend.
Earnings per share, growth per year−42.4%
Dividend (yield on the price)4.9%
Profit margin 2018 to 2023 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.2% → 0%
2022 sits 182% above its own trend. The rate follows the median trend of the last 5 years, not that single year.

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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Scientific & Technical Instruments · 159 stocks

Beats the industry median on 6/11 measures
A mixed picture versus its industry peers.
Valuation
Quality Score 38 · Bottom 25%
Fair Value upside +78% · Top 25%
Profitability
Return on assets 1% · Below median
Net margin (TTM) −2% · Bottom 25%
Operating margin (TTM) 4% · Below median
Growth and dividend
Revenue growth 5% · Above median
Dividend yield (TTM) 4.9% · Top 25%
Balance sheet
Debt / equity 0.22× · Highest 25%

Valuation Multiplesvs Scientific & Technical Instruments median · lower = cheaper

P/B 0.56× · Cheapest 25%
P/S (TTM) 0.45× · Cheapest 25%
EV/EBITDA 9.7× · Cheapest 25%

Strength profile in five axes (Snowflake)

VALUEFUTUREPASTHEALTHDIVIDEND
This stock
VALUEFUTUREPASTHEALTHDIVIDEND
Sector peers
VALUE (fair-value potential)100 · sector 0
FUTURE (revenue growth)27 · sector 25
PAST (return on equity)0 · sector 24
HEALTH (low debt)89 · sector 98
DIVIDEND (yield)97 · sector 19

Context: sector, industry, market

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

None of the checked exposures detected

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AVIC Chengdu Aircraft Company 302132 ¥59.95 ¥19.61 −67%
Fortive Corporation FTV $55.95 $34.86 −38%
Trimble Inc TRMB $59.30 $29.11 −51%
Cognex Corporation CGNX $58.19 $38.50 −34%
Wuhan Guide Infrared Co 002414 ¥12.23 ¥9.52 −22%

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Luna Innovations Incorporated · Fair Value
$2.38 +44%Fair Value
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Cite: Fair Value Calculator (2026). "Luna Innovations Incorporated Fair Value". https://www.fairvalue-calculator.com/stock/LUNA

Frequently asked questions

Is Luna Innovations Incorporated (LUNA) overvalued or undervalued?
As of Sep 23, 2026, our model estimates a fair value of $2.38 versus the last price from Sep 17, 2026 of $1.34, about +78% upside (undervalued).
What is the fair value of LUNA?
Our model-based fair value for Luna Innovations Incorporated is $2.38 (as of Sep 23, 2026), built from audited fundamentals. Last price (from Sep 17, 2026): $1.34.
What is the quality score of LUNA?
Luna Innovations Incorporated has a Quality Score of 38/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Luna Innovations Incorporated (LUNA)?
Our model-based price target is the fair value of $2.38 (as of Sep 23, 2026) from 5 valuation models. Cautious scenario $1.62, optimistic scenario $3.13. It is a calculation from audited fundamentals, not an analyst target.
What is the Luna Innovations Incorporated stock forecast for 2026?
Our models put fair value at $2.38, about +78% upside versus the last price from Sep 17, 2026 of $1.34 (undervalued). Cautious scenario $1.62, optimistic scenario $3.13. The calculation is refreshed regularly with new filings.
What is the revenue of Luna Innovations Incorporated (LUNA)?
Luna Innovations Incorporated reported trailing-twelve-month revenue of about $117M (latest available figure, as of Sep 23, 2026).
Does Luna Innovations Incorporated pay a dividend?
Luna Innovations Incorporated currently shows a dividend yield of about 4.86% relative to its recent price (as of Sep 23, 2026).
What is the intrinsic value of Luna Innovations Incorporated (LUNA)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Luna Innovations Incorporated it is $2.38 per share (as of Sep 23, 2026), against a price of $1.34. It is the blended result of 5 valuation models (cash flow, earnings, asset, dividend).
Is Luna Innovations Incorporated stock overvalued or undervalued in 2026?
As of Sep 23, 2026, LUNA trades below its calculated fair value: price $1.34, fair value $2.38, a gap of about +78% (undervalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of LUNA?
No. The price is what the market pays today ($1.34); the fair value is what the company's own numbers justify ($2.38). For Luna Innovations Incorporated the two are $1.04 per share apart. That gap is exactly why we show both numbers side by side.
How much is Luna Innovations Incorporated worth?
The market values Luna Innovations Incorporated at about $52.0M (market capitalisation, as of Sep 23, 2026). Per share that is $1.34; our models calculate a fair value of $2.38 per share.
What do the bullish and bearish scenarios say about LUNA?
Our models span a range for Luna Innovations Incorporated: cautious scenario $1.62, base $2.38, optimistic $3.13 per share (as of Sep 23, 2026, price $1.34). The range comes from different growth and margin assumptions, not from analyst opinions.
How solid is the balance sheet of Luna Innovations Incorporated (LUNA)?
Balance-sheet figures for Luna Innovations Incorporated (as of Sep 23, 2026): return on equity −1.2%, debt of 0.22 per unit of equity. They feed the Quality Score of 38/100, which measures business quality independently of the share price.
How far is LUNA from its 52-week high?
Luna Innovations Incorporated trades at $1.34, about 23% below its 52-week high of $1.75 and 54% above the low of $0.8700 (as of Sep 17, 2026). Distance from the high says nothing about value: that is what the fair value of $2.38 is for.
Which stocks are comparable to Luna Innovations Incorporated?
From the same area (Technology) we also value Keysight Technologies, Inc, Garmin Ltd, Teledyne Technologies Incorporated, Chroma ATE Inc, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Luna Innovations Incorporated stock attractive at the current price?
The data as of Sep 23, 2026: price $1.34, calculated fair value $2.38 (+78%), Quality Score 38/100, from 5 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of LUNA calculated?
We run Luna Innovations Incorporated through 5 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $2.38, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 14.0 % above its aggregate fair value. Luna Innovations Incorporated currently trades 78 % below its own fair value, and the market average says nothing about that. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Luna Innovations Incorporated (LUNA)?
The latest price we hold is from Sep 17, 2026 and stands at $1.34. Our model-based fair value is $2.38, about +78% upside (undervalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Luna Innovations Incorporated right now?
The large discount to fair value meets weak quality (38/100). That raises the risk this is a value trap rather than a bargain. The price is below even our cautious bear case ($1.62). The market is more pessimistic than our downside scenario. A fairly wide model range ($1.62 to $3.13) leaves room in how you read the outcome.

Key figures of Luna Innovations Incorporated

How large is the market capitalisation of Luna Innovations Incorporated (LUNA)?
The market capitalisation of Luna Innovations Incorporated is $52.0M. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Luna Innovations Incorporated (LUNA)?
The price-to-sales ratio of Luna Innovations Incorporated is 0.45 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Luna Innovations Incorporated (LUNA)?
Earnings per share at Luna Innovations Incorporated are $−0.0300. Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Luna Innovations Incorporated (LUNA)?
The dividend yield of Luna Innovations Incorporated is 4.9%. Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Luna Innovations Incorporated (LUNA)?
The net margin of Luna Innovations Incorporated is −1.8% (fiscal year 2023). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Luna Innovations Incorporated (LUNA)?
The return on equity (ROE) of Luna Innovations Incorporated is −1.2% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Luna Innovations Incorporated (LUNA)?
On an EBIT basis the return on assets of Luna Innovations Incorporated is 0.3% (avg 4y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Luna Innovations Incorporated (LUNA)?
The operating margin of Luna Innovations Incorporated is 3.8% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Luna Innovations Incorporated (LUNA)?
Revenue at Luna Innovations Incorporated is growing +5.3% versus a year earlier (3y avg +25.4%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Luna Innovations Incorporated (LUNA)?
Earnings per share at Luna Innovations Incorporated are growing −67.6% versus a year earlier. How much earnings per share grew versus a year earlier.
How much free cash flow does Luna Innovations Incorporated (LUNA) generate?
The free cash flow of Luna Innovations Incorporated is −$15.9M (fiscal year 2023). The cash truly left after running and investing in the business, this is what pays dividends and buybacks.
How much net debt does Luna Innovations Incorporated (LUNA) carry?
The net debt of Luna Innovations Incorporated is $22.3M (fiscal year 2022). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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