Mobileye Lowered Revenue Outlook But These Analysts Are Still Bullish - Here's Why

Needham analyst Quinn Bolton reiterated Mobileye Global Inc MBLY with a Buy and a $43 price target.

Mobileye reported a solid quarter but slightly lowered its CY23 revenue forecast as SuperVision (SV) shipments are tracking towards the low end of guidance of 100-115k units. 

Bolton's key takeaways revolve around progress with higher average selling price (ASP) programs. MBLY added an SV engagement with a 10th OEM in 3Q23. 

These OEMs are geographically diverse, and of the 7 engagements outstanding, 6 have a >80% chance of converting into design wins. 

Ford Motor Co's F BlueCruise may contribute 500k units to Cloud-Enhanced (CE) ADAS in CY24. The new FAW relationship adds another SV and Chaueffer (CAV) customer. 

The first SV Lite win (Tier-2 supplier at ~$200 ASP) adds to 2025 ASP estimates and comes ~6 months after the company announced the platform.

Bolton views each of the opportunities underscores his "stair-stepping up the ADAS stack" thesis.

The analyst projects Q4 revenue of $635 million (prior $650 million) vs. consensus $659.91 million and EPS of $0.24 (prior $0.23) vs. consensus $0.23.

Raymond James analyst Brian Gesuale had a strong Buy on the stock with a price target of $50.

The re-rating reflects the sales and adjusted EBITDA beat by 1% and 13%, margins impress (36% vs. 32% Raymond James estimate), and business development charges full steam ahead.

The 4Q SV shipments will touch the low end of the prior guide through success with Zeekr, Polestar, and FAW rollouts, progress with 10 core OEM prospects, and growing global interest.

Content and vehicle thesis progressing, the analyst notes. Low single digit ASP growth to $54, design wins expectations strong, CPV growth, 9.4 million systems shipped, and volume momentum.

The analyst sees 2024 as poised for accelerating growth, expanding margins, and potential award announcements should drive appreciation.

Price Action: MBLY shares traded lower by 3.92% at $34.99 on the last check Friday.