Mobileye's Deal Wins Signal More Such Success Backed By Demand For SuperVision, Contributing To Higher Margins & FCF, Analysts Say

  • Needham analyst Rajvindra Gill maintained Mobileye Global Inc MBLY with a Buy and raised the price target from $43 to $45.
  • Mobileye's 4Q22 numbers beat across all the analyst's metrics, and management guided for a higher CY23 topline
  • ASPs jumped meaningfully in the quarter as demand for SuperVision proliferated. 
  • Indeed, Mobileye bagged the first SV win outside China, and the analyst expects an additional Western OEM likely in 2H23. 
  • Notably, the new EU OEM also signed a Chauffer deal. 
  • The deals showcased the success of the modular approach. 
  • Near-term revenue will be vulnerable to supply constraints and conservative OEM outlooks, but remain more confident in the MBLY story as orders underpin a growing pipeline at higher ASPs.
  • Baird analyst maintained Outperform and raised the price target from $39 to $40.
  • The analyst saw the opportunity associated with SuperVision and would view any related near-term trading volatility as buying opportunities.
  • The analyst remained focused on the premium ADAS opportunity, transforming MBLY into a unit and content-per-vehicle story (i.e., higher ASPs). 
  • The analyst expected one additional SuperVision customer award in 2H23, and the agreement with the premium European OEM has now expanded to include a Chauffeur program, with management observing that essentially every SuperVision customer discussion now also includes Chauffeur.
  • Loop Capital analyst had a Buy with a $45 price target. MBLY is shifting from pure volume to a combination of volume and higher content per vehicle. 
  • SuperVision with ZEEKR (China) is a significant catalyst in driving OEM interest.
  • The analyst reiterated interest in investing in best-of-breed into strong, structural long-term societal trends and views autonomous and MBLY of this ilk. 
  • Moreover, MBLY, already the 70% share leader in "Phase 1," offers robust capability across the autonomous spectrum and likely has an opportunity to become synonymous with autonomous.
  • Raymond James analyst Brian Gesuale reiterated Strong Buy with a $50 price target.
  • The results and guide were ahead of the analyst's expectations, and his confidence in his thesis and model was more robust, while his estimates sit with a heavier upwards bias.
  • MBLY should continue to tick higher as the market builds conviction in the standalone entity and the company executes while proving its proprietary solutions and high barriers to entry create an attractive model that supports gross margins in the ~65%-70% range and annual FCF generation at ~$400 million.
  • Price Action: MBLY shares traded lower by 2.56% at $35.05 on the last check Friday.
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