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Mobileye Recoups Most Of Its Tesla-Influenced Losses

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Mobileye Recoups Most Of Its Tesla-Influenced Losses

Mobileye NV (NYSE: MBLY) may be used to volatility in the stock, as shares are higher by more than 12 percent since the start of 2016, but lower by more than 20 percent over the past year.

Mobileye's stock was under heavy pressure back in April when notable short seller Citron Research published a scathing bear thesis on the stock, which it valued at just $11 at the time.

Related Link: Citron: Mobileye Worth Just $11 Now And "Goldman Sachs Knows It"

Mobileye's stock was also hard hit on Tuesday after the company said during a conference call that it will no longer continue cooperating with Tesla Motors Inc (NASDAQ: TSLA) on future technologies.

Mobileye's stock closed for trading at $49.30 on Monday — a day before the announcement. The Israel-based company's Tuesday conference call took place before the U.S. market open and shares opened for trading at $43.33 and hit an intra-day low of $42.15 before closing the day at $45.33.

On Wednesday, the stock regained most of its losses at closed at $47.63. Ahead of Thursday's market open the stock was seen trading at $47.86.

Why A Rebound?

The loss of Tesla as a client is notable in the sense that Tesla is a big name in the automotive segment. However, a big name doesn't necessarily imply it has a big dollar amount contract with Mobileye.

Related Link: Mobileye Tanks After Partnership With Tesla Ends

In fact, Tesla accounted for around 1 percent of Mobileye's current revenue. In addition, Mobileye already guided its 2019 revenue to be $1.1 billion and Tesla's contribution to that would be around 2 percent.

Wall Street analysts were quick to point out this fact. Barron's cited Dougherty & Co's Charles Anderson, who argued in a research note that Tesla wants to develop its autonomous driving technologies in-house.

Meanwhile, Mobileye's portfolio of clients consists of more than 20 automakers and stakeholders. In fact, Mobileye's clients account for more than 50 percent of the total number of vehicles sold worldwide.

Bottom line, Anderson concluded that Mobileye will continue being a leader in the advanced driver assistance systems (ADAS) space for years to come.

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Latest Ratings for MBLY

DateFirmActionFromTo
Apr 2017BairdDowngradesOutperformNeutral
Mar 2017PiperJaffrayDowngradesOverweightNeutral
Mar 2017Goldman SachsDowngradesBuyNeutral

View More Analyst Ratings for MBLY
View the Latest Analyst Ratings

 

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