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Why MicroVision Shares Are Cratering Today

By James Brumley – Oct 29, 2021 at 1:03PM

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The autonomous-driving tech company fell short of last quarter's sales and earnings estimates.

What happened

Shares of lidar (light detection and ranging) technology outfit MicroVision (MVIS 13.95%) are down nearly 20% as of midday Friday following the release of its fiscal Q3 results. The company's top and bottom lines both missed analyst estimates, extending and rekindling a pullback that's been underway since June's peak.

So what

For the three-month stretch ending in September, MicroVision lost $9.3 million on $718 million worth of revenue. On a per-share basis, the company reported a loss of $0.06. While sales improved 12%, the loss more than tripled on soaring R&D and administrative expenses. In the comparable quarter a year earlier, MicroVision lost $0.02 per share.

Falling chart drawn on a chalkboard.

Image source: Getty Images.

Despite the deteriorating bottom line, management remains upbeat about the future. CEO Sumit Sharma commented during the third quarter's earnings conference call, "No lidar company has yet secured an OEM deal that was recorded on its financial statements as meaningful backlog. I believe MicroVision is ahead of all of our competitors in several key areas." He added, "Based on our work with a leading global consulting firm, we expect OEM to make partnership decisions after careful and thorough evaluation in the next 16 months for launch of new EV models with more advanced ADAS features, which will start to ship in 2025."

Now what

Sharma's optimism clearly failed to convince most investors, many of whom have already been waiting years to see the lidar opportunity bear fruit. Not only is significant revenue still four years away, there's no actual assurance that MicroVision will actually be the preferred lidar provider for car manufacturers when the technology is finally fully ready.

Given the stock's present momentum and the technical, regulatory, and marketing challenges that could materialize over the course of the next few years, Friday's steep sell-off isn't necessarily a buying opportunity. This name is still a falling knife too dangerous for most investors to try to catch.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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