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Mobileye stock forecast: Can MBLY shares resist giving back all gains from IPO pop?

By  Yoke Wong

Edited by Jekaterina Drozdovica

17:12, 10 November 2022

Smartphone with logo of Israeli autonomous driving company Mobileye on screen in front of business website. Focus on center-left of phone display.
Can MBLY shares resist giving back all gains from IPO pop? Photo: T. Schneider / Shutterstock

Israel-based autonomous driving technology developer Mobileye Global (MBLY) stock remained firm two weeks after floating on 26 October. The company listed its shares on the Nasdaq Stock Exchange under the ticker MBLY with an initial price offering (IPO) at $21 a share, spinning off from its parent Intel. 

MBLY stock price started trading at $26.71 and closed at $28.97 on the same day, continuing to rise in the following sessions, peaking at $29.07 on 29 October. Although MBLY stock price has since fallen to $27.52, it remained 31% above its IPO price as of 10 November. 

Mobileye Global Price Since IPO

Will the share price return to post-IPO highs and is there more upside to come in the developing autonomous driving market? Here we take a look at the key factors that share Mobileye stock forecast

What is Mobileye?

Jerusalem-headquartered Mobileye was founded in 1999 by Professor Amnon Shashua, who serves as the company’s CEO. 

Shashua adapted his academic research at the Hebrew University of Jerusalem into a monocular vision system to detect vehicles using only a camera and software algorithms on a processor. This developed into the advanced driver-assistance systems (ADAS) over the past two decades, propelling the company into a leading developer and provider of autonomous driving technology. 

ADAS uses sensors and cameras to detect hazards and obstacles while driving and parking a vehicle. The technology also includes adaptive cruise control, which adjusts a vehicle’s speed to match the speed limit and traffic. It can also centre vehicles in a single lane, monitor tyre pressure, track blind spots and more.

To complement its ADAS platforms, Mobileye developed EyeQ computer vision chips, which the company’s ADAS system operates on. The first generation of EyeQ chips was launched in 2007 and the company has since launched seven generations of the product as of November 2022. According to Mobileye, it has shipped more than 100 million of EyeQ chips with more than 700 vehicle models adopting the technology. 

The company went public in the New York Stock Exchange (NYSE) in 2014 but delisted after its acquisition by US chip maker Intel (INTC) in 2017. The spin-off and the IPO on 26 October 2022 was to raise funds to repay loan notes owed to Intel and as working capital. 

Mobile said on 1 November:

“A significant portion of the net proceeds is being used for repayment on a note owed to Mobileye’s parent company, Intel Corporation, and Mobileye intends to use the remaining net proceeds for working capital and general corporate purposes.”

Intel retained control of the company, holding over 750 million Class B shares, which have 10 times more voting power than Class A shares.

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Mobileye’s revenue jumps in Q2 but losses remain

Mobileye’s revenue for Q2 2022 jumped to $460m, up 41% compared with the same time last year, according to the firm’s second-quarter report. The company’s operating income increased by 43% year-on-year to $190m, representing a 41% operating income margin. 

In the six months ended 2 July, Mobileye’s revenue grew to $854m, up 21.3% from a year ago. Despite rising revenue, the company incurred a net loss of $67m in the first half of 2022. 

In its IPO filing, Mobileye attributed the losses to “an increase in amortisation of acquired intangible assets and share-based compensation expense, as well as an increase in research and development expenses, partially offset by an increase in revenue.”

Meanwhile, research and development expenses in the first half of 2022 jumped by 28% year-on-year to $359m.    

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Six months ended

Year ended

 

July 2, 2022

June 26, 2021

December 25, 2021

December 26, 2020

December 28, 2019

Revenue

$854m

$704m

$1.386bn

$967m

$879m

Gross profit

$405m

$348m

$655m

$376m

$423m

Operating expenses

 

Research and development

$359m

$258m

$544m

$440m

$384m

Sales and marketing

$64m

$65m

$134m

$116m

$100m

Total operating expenses

$441m

$341m

$712m

$589m

$509m

Operating income (loss)

$(36)m

$7m

$(57)m

$(213)m

$(86)m

Net income (loss)

$(67)m

$4m

$(75)m

$(196)m

$(328)m

Source: Mobileye’s SEC filings, unaudited data

The ADAS provider was expecting future sales to grow to nearly 37 million units, more than doubled from the 16 million units shipped in the first half of this year.

Mobileye added that it was in late-stage discussions with several major Original Equipment Manufacturers (OEMs) for the supply of its advanced product portfolio, including upgraded features. It has completed a 2,000+ kilometre trial with a major European OEM on all road types, including night-time driving in several urban centres. 

Will robust market outlook boost Mobileye stock forecast?

With research showing automation can reduce the number of road accidents and crashes, among other benefits, there is increasing adoption of advanced driver-assistance systems in vehicles. In June 2022 market research consultancy Fortune Business Insight forecast the global autonomous car market to grow at a compound annual growth rate (CAGR) of 31.3%, reaching $11.03bn in 2021-2028.  

Although fully autonomous vehicles are not available on the roads in most countries, some major economies are adopting autonomous driving technologies, which could boost demand for Mobileye’s technology.

In April 2022, the British government confirmed changes to its existing Highway Code, which allowed drivers to view content not related to driving on built-in display screens while the self-driving vehicle is in control. However, the motorists must be ready to resume control in a timely way if prompted and it will still be illegal to use mobile phones in self-driving mode. 

Britain has approved the first self-driving vehicles, which could be deployed on the road later this year. 

In March, US regulators removed the requirement for automated vehicle manufacturers to equip fully autonomous vehicles with manual driving controls, Reuters reported. Fully automated vehicles will be used as robotaxis, eliminating the need for taxi drivers. 

Mobileye stock forecast for 2023 and beyond

As Mobileye stock was listed for less than a month, analysts didn’t provide any price targets, as of 10 November. As a result of limited data, financial data provider Market Beat was yet to collate any market consensus and Mobileye share price forecast from Wall Street analysts. 

Algorithm-based forecasting website Wallet Investor did provide a Mobileye stock forecast for 2023, which,  as of 10 November, was bearish. Its MBLY stock forecast predicted the share price to crash below a dollar in the next 12 months. 

Many analysts have refrained from making mid-term MBLY stock forecasts and there were no Mobileye stock forecasts for 2025 at the time of writing. 

Meanwhile, according to Investing.com’s technical analysis, the weekly moving average (MA) for MBLY stock is exhibiting a neutral trend, and technical indicators suggested a ‘buy’ for the stock. Sentiment for the stock was mostly bullish over the past week. 

Note, analysts’ and algorithm-based Mobileye stock predictions can be wrong. They shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before trading.

Remember, past performance does not guarantee future returns. And never trade money you cannot afford to lose.

FAQs

Is Mobileye a good stock to buy?

Whether Mobileye is a good stock to buy or not will depend on your investing goals, portfolio composition and risk profile. You should do your own research. You should always conduct due diligence before trading, looking at the latest news, a wide range of analyst commentary, technical and fundamental analysis. Note that past performance does not guarantee future returns. And never trade money you cannot afford to lose.

Will Mobileye stock go up or down?

No one can say for sure whether Mobileye stock price will go up or down. Due to insufficient trading data, analysts were uncertain about the company outlook and many have refrained from giving Mobileye stock forecasts.

Should I invest in Mobileye stock?

Only you can decide if you should invest in Mobileye stock. Please do your research before making any investment decision. Remember that Mobileye stock forecasts by analysts can be wrong.

You should always conduct due diligence before trading, looking at the latest news, a wide range of analyst commentary, technical and fundamental analysis. Note that past performance does not guarantee future returns. And never trade money you cannot afford to lose.

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CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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