Business

Looking to ride a self-driving Boom? Analysts recommend 2 stocks to buy


The auto industry is in the early stages of a major overhaul, much like the first bloom and spread of the internal combustion engine automobile. Important new technologies are exploding, including electric powertrains – and autonomously controlled vehicles. In China, automakers are already building self-driving cars with all-sensor systems, and they’re putting them on the road. We can expect a similar development in the US auto industry, possibly starting as early as next year.

The beginning of change is already here. In Houston, Texas, Domino’s Pizza, Kroger and FedEx are conducting trials using autonomous vehicles to deliver everything from prepared foods to groceries to packages, while in California, 7-Eleven running a similar experiment in Silicon Valley. If successful, these small-scale trials hold the promise of expansion and major changes to logistics networks. Some estimates predict the ultimate potential impact of autonomous vehicles on the global economy to be $7 trillion annually.

However, this would not be possible without a major change in the sensor system that makes self-driving cars possible. These systems, known as LiDAR, might have been more expensive 10 years ago than the rest of the car – but in recent years that cost has dropped to less than $1,000 per system, and the reduction in That cost comes with improvements in quality. The advent of affordable, high-quality sensor systems, the ‘eyes’ of autonomous vehicles, marks the solution to a major challenge facing the industry.

In that context, we used TipRanks Platform for insights on two stocks closely linked to the self-driving car revolution. The pair has recently been favored by several Street analysts, who predict big profits to come for both. So let’s see how willing they are to benefit from this new model.

Mobileye Global (MBLY)

The first is Mobileye, a company that started with advanced driver assistance technology and has since leveraged that experience into autonomous vehicle sensing systems. The company’s driver-assistance and safety systems are well known – the sensors trigger an alarm if you drive too close to the vehicle in front or start to deviate from your lane. More than 25 automakers have partnered with Mobileye to install these systems, and more than 50 million units are in circulation globally. The company is currently working with 13 automakers to enable self-driving car systems.

The company’s service options cover a range of functions between simple driver assistance and fully autonomous driving. From cloud enhancement and front-facing cameras, to 360-degree camera coverage to the addition of LiDAR sensors to turnkey solutions that will tailor self-driving cars to user needs. Fully automated Mobileye Drive systems that include options for mobility as a service will have obvious applications in delivery, public transit and robotic taxis.

However, all of this required capital to a large extent – ​​and to raise that capital, Mobileye re-entered the mass market. The company went public until it was acquired by Intel in 2017; in October of this year, it spun off and held its second public offering. The event saw the token MBLY enter the market on October 26, bringing 41 million shares to market at $21 per share and including a call option on over 6 million additional shares of the company. issue underwriter. When the offering ended, Mobileye successfully raised a total of approximately $990 million.

Start covering this stock for Raymond James, 5-star analyst Brian Gesuale notes the company’s $40 billion total addressable market and describes the company as “the undisputed pioneer and market leader in computer vision/human assistance systems.” Advanced Driving (ADAS) in the automotive industry.”

Looking ahead, Gesuale predicts solid performance, noting: “We are modeling revenue growth of 27% ($1.76B), 24% ($2.18B) and 33% (2%). ,89 billion) from 2022 to 2024. We expect 2022 and 2023 to be the slowest growth periods over the next 5 years due to the supply chain impeding auto production and the mathematical effects of the engine. larger revenue base but eventually see new, higher content/media products driving the acceleration again. We are modeling EBITDA of $594 million, $627 million, and $959 million for the same time period with margins as low as 30%.”

The stock is poised to benefit from upcoming major product launches, increased content per vehicle, improved margins, and accelerated growth as autonomous vehicles become a reality. .”

Along with these upbeat remarks, the analyst gives Mobileye a Strong Buy rating on the new stock and a $50 price target to suggest a strong 84% upside over the next 12 months. (To see Gesuale’s achievements, click here)

Overall, we’re looking at a stock with a Moderate Buy consensus rating here. MBLY has 11 recorded analyst ratings, including 8 Buy and 3 Hold. The stock is currently selling for $27.22 and an average price target of $37.5 suggests a potential one-year gain of 38%. (View MBLY stock forecast on TipRanks)

light technology (LAZR)

Next is Luminar, a Palo Alto-based Silicon Valley company that designs and manufactures LiDAR systems. Luminar works at all stages of development and manufacturing, from the design of the semiconductor chip that is the ‘brain’ of the system, to the physical hardware of the electronics, transceivers and receivers. keep the system running.

Luminar has been publicly trading for almost two years after its IPOd adopted the SPAC roadmap, and its stock in that time has fallen significantly from the peak reached in December 2020. The falling share price has already reflected. reality of a company not quite ready to move into full production, as well as regular quarterly net losses and SPAC falling out of favor. However, the most recent quarterly report shows some reason for optimism.

In its financial statement for the third quarter of 2022, revenue increased sharply, 60% year-on-year, to $12.8 million. Q3 revenue beat forecasts and benefited from an acceleration in customer contracts; it also showed a 29% increase from the previous quarter. While the company posted a non-GAAP net loss of $63.4 million, up to 18 cents per share, it also far exceeded Street expectations. Also, interested investors, Luminar ended Q3 with over $553 million in cash assets on hand — even after a ~$52 million quarterly cash burn.

Most importantly, however, is the announcement that the Luminar has finally entered regular production, with its introduction on SAIC’s R7 vehicle. SAIC is China’s largest automaker, and the R7 is the flagship model of the company’s Rising Auto brand. The introduction of Luminar’s sensor systems on the road alongside SAIC’s vehicles marks an important milestone for the LiDAR company and its introduction to consumer vehicles.

analyst Emmanuel Rosnerof Deutsche Bank, reported on Luminar, and on the latest developments, he said, “The company seems to be on the right track with the construction of its new highly automated production facility, with capacity 250,000 units will be operational in the second half of 2023, which we estimate could help Luminar reduce BoM to $500 by 2024. Overall, we believe Luminar continues to show solid traction in meeting or exceeding its short-term goals and looking forward to more detailed information on the path to profitability with existing capital… We continue to view LAZR as a positioned LiDAR supplier best to win meaningful business wins for L3+ autonomy.”

Going forward, Rosner offers a Buy rating on LAZR stock, along with a $15 price target, implying a solid 101% gain over the next year. (To see Rosner’s achievements, click here)

Overall, LAZR stock receives a Moderate Buy rating from analysts’ consensus. This rating is based on 9 recent reviews from Street, divided into 5 Buy and 4 Hold. With an average price target of $14 and a current trading price of $7.45, Luminar stock shows a one-year upside potential of 88%. (View LAZR stock forecast on TipRanks)

To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best stocks to buyone tool that unifies all of TipRanks’ equity insights.

deny the responsibility: The opinions expressed in this article are those of prominent analysts only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.

news7f

News7F: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button