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Why Aeva Technologies Stock Is Lower Today

By John Rosevear - Jul 19, 2021 at 11:10AM

Key Points

  • Aeva Technologies is one of several new companies competing to create lidar sensors for vehicles.
  • Morgan Stanley sees a few reasons to think Aeva stands out from the pack.
  • But the current stock price may be optimistic.

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A Wall Street analyst initiated coverage with a rating of "meh."

What happened

Shares of lidar maker Aeva Technologies (AEVA -7.85%) were trading sharply lower on Monday, after a Morgan Stanley analyst initiated coverage of the company with a not-exactly-bullish note.

As of 10:45 a.m. EDT, Aeva was down about 10.7% from Friday's closing price.

So what

In a note released early on Monday morning, Morgan Stanley analyst Joseph Moore initiated coverage of Aeva with a rating of equal weight and a price target of $11. (Aeva closed at $9.71 on Friday.) 

Moore wrote that Aeva's so-called 4D lidar technology is "unique" in the automotive driver-assistance market, and that the company has "carved out material differentiation" in the increasingly crowded lidar-for-autos space. 

A white Mercedes-Benz SUV with visible lidar sensors and Aeva and ZF logos on its doors.

In some important ways, Aeva Technologies stands out from rivals in a crowded field. But its current valuation seems generous, an analyst wrote. Image source: Aeva Technologies.

He also cited the company's partnerships -- including those with Japanese auto-parts giant Denso and Volkswagen-backed autonomous truck start-up TuSimple Holdings (TSP -5.04%) -- as factors that help Aeva stand out from the pack.

So why is the stock down? It's that price target: Moore thinks it will take some time for Aeva, which only went public in March, to grow into its current valuation -- or put another way, the stock looks expensive right now.

Now what

Investors watching Aeva and others in this space can look ahead to the company's second-quarter earnings report, likely in mid-August.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Volkswagen AG. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Aeva Technologies, Inc. Stock Quote
Aeva Technologies, Inc.
$4.11 (-7.85%) $0.35
Volkswagen Aktiengesellschaft Stock Quote
Volkswagen Aktiengesellschaft
$19.32 (-1.43%) $0.28
DENSO Corporation Stock Quote
DENSO Corporation
$27.73 (-1.49%) $0.42
TuSimple Holdings Inc. Stock Quote
TuSimple Holdings Inc.
$9.05 (-5.04%) $0.48

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