Piper Jaffray’s Alexander E. Potter believes that Mobileye NV MBLY is a compelling stock for “investors seeking a defensible story with exposure to the fast-growing market for advanced car safety.”
Potter initiated coverage of the company with an Overweight rating and price target of $50.
Visible Runway
Given the company’s growing backlog, as well as high visibility into the runway for its to achieve revenue of $1.1 billion by 2019, the analyst believes that Mobileye is already “spec’ed in” with a large number of multi-year vehicle automation programs.
“Near-term growth will stem from partial-automation products, but MBLY is also blazing trails in the more advanced field of fully-autonomous driving,” Potter mentioned, while adding, “Since auto makers are justifiably nervous about selecting unproven suppliers, we believe it could be years before MBLY encounters true competition.”
Superior Technology
Potter believes that Mobileye’s track record sets it apart as having a superior product. Given the company’s vehicle platforms that last for more than five years and the fear of switching suppliers among its customers, the analyst believes that Mobileye is unlikely to lose market share.
“Of all disruptive automotive technologies, we think vehicle automation is the most attractive investment. There are lots of reasons to get excited about rising technological content in automobiles — but in our view, vehicle automation is the most "investable" theme,” the analyst added.
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