Citron Still Thinks Mobileye Is Way Overvalued

Noted short-selling arm, Citron Research, has not pulled any punches on Mobileye NV MBLY.

Citron's Andrew Left told Benzinga on Wednesday morning that despite news out of the Consumers Electronic Show in Las Vegas, Mobileye stock is still way overvalued.

The company announced new road experience management technology at CES. General Motors Company GM said it will use the new digital mapping system, which it "characterized it as a critical enabler for achieving semi- and fully-autonomous driving." Volkswagen AG (ADR) VLKAY also announced it is partnering with Mobileye.

Citron Research issued its short thesis on Mobileye back in December. The firm said the auto-sensor chip company was its top short idea for 2016 and issued a $25 short-term price target. In a tweet, the short-selling firm said, "Short of the year... Peashooter to a gunfight."

Deutsche Bank analyst Rod Lache said that following "'numerous discussions" with consultants, suppliers and automakers, he thinks "[e]ven MBLY's largest and most capable competitors continue to tell us that replicating the accuracy of MBLY's latest systems is much harder investors perceive." The analyst also noted that the barriers to entry in the market are very high, but more importantly, Mobileye continues to extend its lead against competition, while constantly innovating.

Citi also came out with a positive note on Mobileye. "Given the growing importance of HD maps we view this rapid launch as a positive development not previously baked into the story," the firm wrote.

Mobileye investors cheered the CES news, as the stock was up more than 5 percent Tuesday morning at $38.05.