In a world where the automotive industry is rapidly transforming, one of the key players that is constantly pushing the boundaries of what is possible is a company that has been setting the pace in autonomous driving technology since its inception in 1999. Their innovative approach to advanced driver assistance systems and autonomous vehicles means that their technology is now found in cars from BMW to General Motors, from Europe to Asia.

With the advent of the next generation EyeQ6H chips, which promise a threefold increase in performance, and advanced systems such as SuperVision, the company is preparing for a new era in traffic safety and efficiency. Although recent financial results showed a decline in sales, key innovations and the company's strong balance sheet suggest that the coming period could bring exciting opportunities. With analyst forecasts suggesting growth potential of up to 100%, this is an ideal time for investors looking for vision and technological advancements that could reshape the future of the automotive industry.

Company introduction

Mobileye Global $MBLY is a renowned company specializing in technologies for autonomous driving and advanced driver assistance systems (ADAS). Founded in 1999 in Israel, it now has a significant global presence with offices and partners around the world. The company is headquartered in Jerusalem, but its technologies are integrated into vehicles manufactured by automakers in North America, Europe, Asia and other regions.

The company focuses on developing and implementing sophisticated systems that enhance safety and driving comfort. Mobileye is best known for its ability to create advanced sensors, camera systems and software that enable real-time detection and analysis of traffic situations. Their main areas of focus include advanced driver assistance systems that include automatic emergency braking, adaptive cruise control and lane keeping systems. They also focus on autonomous driving, develop technologies for fully automatic vehicles and offer advanced mapping and location systems.

Mobileye boasts technological advancements that include products such as EyeQ chips - advanced image processing chips that enable efficient real-time object detection. Their Mobileye 8 Connect system combines hardware and software for improved performance and reliability, while Road Experience Management (REM) provides accurate information about road conditions and updates road data in real time.

Partnerships and history

The company has entered into significant partnerships with leading automakers, including BMW, Audi and General Motorsenabling the integration of their technology into these manufacturers' vehicles. In 2017, Mobileye came under the ownership of Intelwhich strengthened its market position and enabled the combination of its technology with Intel processors, further expanding its offering in the autonomous driving space.

Mobileye's history begins in 1999, when it was founded by Amit Murt and his team with the aim of developing technology to enhance safety in driving with camera systems. Gradually, the company expanded, going public on NASDAQ in 2014 and continued to develop and expand its portfolio of products and technologies. Today, Mobileye is a global leader in autonomous driving, constantly innovating and contributing to a safer future for transportation.

- Although Intel acquired the company in 2017, it had an IPO in 2022, so $MBLY stock continues to be publicly traded. For more information, please see here.

Mobileye Global: Implied growth potential of 100%?

While Citigroup analyst Itay Michaeli has cut his price target for Mobileye several times, the current price target represents an attractive 100% upside potential from where the stock was at the end of last week.

Michaeli's optimism is primarily tied to the expectation that advances in autonomous vehicles (AVs) - although that sounds like a platitude - will boost Mobileye's technology adoption. This includes their next-generation EyeQ6H platform, which is a centralized chip with three times the power capacity of the previous version, and which will be tasked with improving ADAS capabilities in autonomous vehicles.

Michaeli's research report also highlights advances in Mobileye's SuperVision technology, which is a comprehensive ADAS system enabled by 11 cameras, Road Experience Management (REM)-based maps and the new centralized EyeQ chips. SuperVision technology boasts support for Level 2, 3 and 4 autonomous capabilities.

Another factor that plays in Mobileye's favor is their impeccable balance sheet. The company is generating positive operating cash flow and as of March 30, had $1.2 billion in cash and equivalent assets, with no debt.

How was the most recent quarter?

On April 25, 2024, Mobileye Global released its financial results for the three months ended March 30, 2024. The first quarter results show a significant 48% year-over-year decline in revenue to $239 million. This decline is attributed to significant inventory consumption by Tier 1 customers.

Loss per share (EPS) was $ -0.27 on a GAAP basis and $ -0.07 on an adjusted (Non-GAAP) basis. Inventory consumption and expected shipment schedule for EyeQTM SoCs during 2024 are in line with previous guidance. Volkswagen Group's announcement of a broad manufacturing contract for advanced products in the first quarter led to an expanded pipeline of advanced negotiations with other global automakers.

"We generated net cash flow from operations of $40 million in the first quarter. Our balance sheet is strong with $1.2 billion in cash and equivalent assets and no debt as of March 30, 2024."

Mobileye's President and CEO, Professor Amnon Shashua, said: "First quarter financial results reflect a reset in the supply chain as excess inventory held by our customers is consumed. We are encouraged that inventory consumption and the associated revenue recovery appears to be in line with what we outlined in January."

Shashua further noted that in terms of business development and strategy, the first quarter was very productive as it generated traction across various waves of future growth. The core and cloud-enhanced ADAS business achieved record levels of design wins in terms of future projected volume, in part due to new features and technologies built into the EyeQ6L product.

"Our development pipeline for SuperVisionTM and ChauffeurTM expanded during the quarter, reflecting key design win announcements from Volkswagen Group and a growing consensus among automakers that eyes-on/hands-off systems (with the ability to transition to eyes-off) are key elements necessary for mainstream vehicles in the near future."

Analysts' expectations

Based on 13 Wall Street analysts who have offered 12-month price targets for Mobileye Global, Inc. over the past 3 months. Class A. The average target price is $37.08 with a high forecast of $53.00 and a low forecast of $25.00.

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