What happened
Mobileye Global (MBLY +0.42%) has only been back on public markets since late October, but the self-driving and computer vision tech company is already turning heads on Wall Street. Shares of Mobileye gained 23% in December, according to data provided by S&P Global Market Intelligence, on optimistic projections from the company and buy-in from the analyst community.
So what
Mobileye was a pioneer in the assisted driving tech business, working with Tesla in the early days of the electric vehicle manufacturer's foray into self-driving cars. The company was acquired by Intel, but returned to public markets late last year.
In early December, Mobileye reported fiscal third-quarter earnings, for the period ended Oct. 1, that were noisy due to the spinoff from Intel, but its guidance for future quarters provided a lot to get excited about. Mobileye expects to generate $527 million to $545 million in revenue in the current quarter, well ahead of the $483 million analysts had expected. For all of fiscal 2022, the company expects to top $1.83 billion in sales and at least $637 million in operating income.
Analysts had expected the company to generate $1.78 billion in annual sales.
The outlook got the attention of Wall Street. In the days that followed results Mobileye was initiated with an overweight rating at J.P. Morgan, and analysts at both Baird and Mizuho raised their price targets. The analyst commentary provided fuel for a continued rally, helping Mobileye shares to advance in December.
NASDAQ: MBLY
Key Data Points
Now what
Mobileye has been on the decline since the start of the new year, with the stock now up only 8.6% since the end of November. It is typical for recent initial public offerings and other stocks new to the market to be volatile in their first months as investors figure out how to value the company.
For those with a long-term mindset, Mobileye looks like an intriguing business. Though the company no longer works with Tesla, its tech is embedded in more than 125 million vehicles manufactured by 50 automakers. The jury is out on when, if ever, the world will have true self-driving vehicles, but there has been great progress in driver-assist safety systems that use Mobileye technology.
Mobileye, with its more than 20 years of experience in sensors and processing systems, should play a major role as vehicles continue to get smarter.
