FBR Cuts Mobileye's Price Target From $50 To $30 Following Not-So-Perfect Quarter

FBR's Christopher Rolland maintained a Market Perform rating on

, while reducing the price target from $50 to $30. The company reported its 4Q15 results on February 24, with a marginally better than anticipated topline. The 1Q16 guidance was in line with expectations. "However, 4Q15 was the smallest topline beat in six quarters, which many bears are likely to view as further evidence of hyper-growth fatigue (particularly after the company slashed its 2016 growth outlook just a few weeks ago)," Rolland stated. The 4Q15 revenue was up 81 percent year on year, beating the consensus expectations, with OEM revenues of $61.2 million benefiting from high volume initiatives implemented in 2015. The gross margin for the quarter was also slightly ahead of the estimate, driven by a higher than expected increase in ASP. The pro forma EPS of $0.15 was ahead of the consensus of $0.14. For 2016, Mobileye guided to revenues of $336 million to $340 million, the midpoint of which was slightly below consensus. For 1Q16, management expects revenue to increase sequentially, although still lower than the consensus expectation. "Management also expects total revenue in 2H16 to be higher than total revenue in 1H16, but not as high percentage-wise as 2H15," the FBR report mentioned. According to the analyst, the guidance "embeds a significant reacceleration of growth as the company matures, a feat often prognosticated but seldom achieved." On the other hand, Mobileye announced that it will open up parts of its architecture to OEM partners, which Rolland sees as a change in strategy.