Analyst: Smart Glasses Maker Vuzix Could Triple Revenue In 2018, Grow Tenfold By 2020

Will 2018 be the year that smart glasses finally take hold?

As Vuzix Corp VUZI unveils its Blade augmented reality smart glasses at CES in Las Vegas this week, one analyst is expecting big growth prospects from the company. 

The Analyst

Christian Schwab of Craig-Hallum Capital initiated coverage on Vuzix with a Buy rating and $12 price target.

The Thesis

Vuzix can capitalize on "explosive growth" in the AR/VR sector, tripling its revenue in 2018 and doubling it again in 2019, Schwab said in a note. (See the analyst's track record here.) 

“Adoption in the explosive growth AR/VR market is just beginning, with IDC calling for spending on AR/VR products and services to grow at a CAGR of over 100 percent through 2021,” said Schwab.

Vuzix revenues could grow nearly tenfold to $51 million in 2020, according to Craig-Hallum. 

Investors have generally focused on consumer uses for AR/VR products, but Vuzix is targeting enterprise business as the first major adopters of the technology, Schwab said. 

The company has 350 customers in pilot programs or buying product, including Airbus and DHL Express, the analyst said. 

2018 Growth Drivers 

The, Inc. AMZN-enabled Blade AR glasses target both the enterprise and consumer markets, Schwab said. The glasses use Vuzix's transparent Waveguide lenses and layer augmented displays over visible reality, the analyst said. 

"With early production currently underway, management believes they can ramp to selling tens of thousands of units" at an average price of $700, he said. 

Vuzix is ramping production of its M300 monocular video display smart glasses and expects to ship tens of thousands of units with an average selling price of $1,100, Schwab said. 

The company recently announced an OEM agreement with Toshiba to build customized smart glasses.

"Vuzix expects Toshiba to purchase at least $5 million of the product in 2018. Vuzix is currently working wtih multiple other Tier 1 companies on potential similar OEM agreements," Schwab said. 

The Vuzix Basics Apps software is projected to have a yearly subscription rate of $600, or $50 per month, and Craig-Hallum predicts the software could hit a 20-percent attach rate with the M3000 glasses. 

Price Action

Shares of Vuzix gained nearly 2 percent on Tuesday, closing at $8.75.

Related Links: 

5 Reasons Why Vuzix Is One Of Chardan Capital's Top Picks In 2018

For Smart Glasses Maker Vuzix, 2018 Could Be 'Transformative'

Photo courtesy of Vuzix. 

Posted In: ARCESChristian SchwabCraig-Hallum CapitalSmart GlassesVRInitiationAnalyst Ratings