Can Anybody Challenge Mobileye In The Driver Automation Space?

A fleet survey Mobileye NV MBLY indicated rising acceptance of advanced driver assistance systems [ADAS], Piper Jaffray’s Alexander E. Potter said in a report. He reiterated an Overweight rating on the company, while raising the price target from $50 to $60.

A survey of 660 US fleets and small businesses indicated an increased rate of ADAS adoption, analyst Alexander Potter noted. Around 30 percent of fleets indicated that they would “probably or definitely” increase ADAS-related purchases in the next three years.

Estimates Revised

The revenue and EPS estimates for FY17 have been raised from $484.6mn to $497.9mn and from $1.02 to $1.05, respectively, to reflect higher ADAS adoption and the expectation of Mobileye being able to maintain its competitive foothold in the camera-based ADAS market.

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“We have added granularity to our model, which is now based on a projection of global ADAS penetration, as well as market share and ASP assumptions for MBLY's own products,” Potter wrote. He expects about 40 percent of all vehicles produced by yearend-2020 to have some level of camera-based ADAS functionality.

The analyst added that no new players are likely to emerge to challenge Mobileye’s “dominance in this particular realm” and that it would take at least two years “before definitive data points emerge to assess the viability of competitive offerings.”

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