nLIGHT Gears Up to Report Q2 Earnings: What's in Store for the Stock?

The consensus mark for second-quarter earnings is pegged at 14 cents per share, unchanged over the past 30 days, indicating year-over-year growth of 133.3%.

The stock has surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 160.99%.

Factors Likely to Influence nLIGHT’s Q2 Results

The company’s second-quarter 2026 results are likely to reflect the benefits of strong demand from the aerospace and defense (A&D) end market. In the A&D space, nLIGHT is tapping into areas like directed energy systems, missile defense and laser sensing, all of which are long-term funding priorities for the Department of Defense (DoD). With defense programs benefiting from rising spending in the United States and among allied nations, the company’s A&D segment is likely to have witnessed strong year-over-year growth in the to-be-reported quarter.

The directed energy end market was a key reason behind the strong performance of its A&D business in the first quarter of 2026. A&D revenues rose 69% year over year to a record $55.1 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.

The directed energy business is expected to have remained a major growth driver in the second quarter of 2026. nLIGHT continues to work on the HELSI-2 program to demonstrate a 1-megawatt-class laser and the Navy’s HELCAP program, which combines the company’s 300-kilowatt laser with its beam control system. The company also launched HADES, its high-energy laser platform that can scale to hundreds of kilowatts and can be used across different military platforms. Progress on these programs is expected to have supported the A&D business during the second quarter of 2026.

nLIGHT’s laser sensing products are used in missile guidance, proximity detection, range finding and countermeasures. These products are already part of several long-running defense programs, and are expected to have contributed to second-quarter growth. In the first quarter of 2026, development revenues increased 38% year over year to $22 million. nLIGHT is also executing on multiple directed energy and laser sensing development programs, where the company’s existing sensing programs, which are in full-rate production, are expected to have contributed positively to the company’s near-term prospects.

However, a key risk that weighs on nLIGHT’s second-quarter prospects is the company’s decision to exit the cutting and welding business. Cutting and welding were still contributing profit on incremental sales, so removing those revenues creates some near-term margin pressure. For the second quarter of 2026, LASR expects product gross margins to be in the range of 37% to 41%. This reflects a steep sequential decline from the first quarter’s product gross margins of 43.6%, indicating that the margins will remain under pressure in the near term.

Earnings Whispers for LASR

Our proven model does not conclusively predict an earnings beat for nLIGHT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

nLIGHT has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Arista Networks, Inc. ANET has an Earnings ESP of +3.08% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks is set to report second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for Arista Networks’ second-quarter 2026 earnings is pegged at 89 cents per share, unchanged over the past 30 days, indicating a rise of 21.9% from the year-ago quarter’s reported figure.

AMETEK AME has an Earnings ESP of +0.39% and a Zacks Rank #2 at present.

AMETEK is slated to report second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for AMETEK’s second-quarter 2026 earnings is pegged at $1.99 per share, unchanged over the past 30 days, indicating a rise of 11.8% from the year-ago quarter’s reported figure.

Advanced Micro Devices AMD has an Earnings ESP of +1.56% and carries a Zacks Rank #2 at present.

Advanced Micro Devices is set to report second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for Advanced Micro Devices’ second-quarter earnings is pegged at $1.61 per share, up by a penny over the past 30 days, indicating a rise of 235.4% from the year-ago quarter’s reported figure.

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This article originally published on Zacks Investment Research (zacks.com).

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