WeRide's Robotaxi And Partnerships Are Key Growth Drivers For Global Expansion: Analyst

Morgan Stanley analyst Tim Hsiao initiated WeRide Inc WRD with an Overweight rating with a price target of $23.

WeRide, a leader in Level 4+ (L4+) autonomous driving technology, is a major player in the global self-driving vehicle sector. The company has achieved significant milestones with its product lineup, including robotaxis, robovans, robobuses, and robosweepers, supported by advanced driver-assistance systems (ADAS).

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Hsiao initiated coverage with an Overweight rating and a price target of $23, underscoring WeRide’s strong position in the autonomous driving (AD) market and potential for growth.

Founded in 2017, WeRide has established itself as a pioneer in L4+ autonomous driving. It launched China’s first open-road testing program for L4+ vehicles in 2018 and progressively rolled out its commercial services, starting with robotaxis in 2019, robobuses in 2020, robovans in 2021, and robosweepers in 2022.

The company currently operates in 30 cities across seven countries, including the U.S., China, the UAE, and Singapore, having secured advanced test permits in these regions.

According to CIC forecasts, the global autonomous driving market is expected to grow at an 80% compound annual growth rate (CAGR) from $93 billion in 2025 to $1.745 trillion by 2030.

Within this market, the penetration of L4+ AD technology is projected to exceed 25% by 2035. For China, the AD market is forecasted to expand at an even faster 85% CAGR, reaching $639 billion by 2030.

The analyst writes that WeRide’s robust product pipeline and partnerships are central to its growth. The company aims to achieve large-scale commercialization of its robotaxi services by 2026, leveraging collaborations such as its partnership with Uber to deploy robotaxis in the UAE.

According to the analyst, the price target of $23 is based on a probability-weighted discounted cash flow (DCF) analysis, assigning weightings of 25% to the bull case, 50% to the base case, and 25% to the bear case.

This valuation reflects WeRide’s long-term potential while accounting for near-term earnings volatility. The target implies a 30x multiple on 2025 estimated price-to-sales. The company is expected to break even by 2027, the analyst said.

As L4+ autonomous vehicle penetration grows globally, WeRide is well-positioned to capitalize on this trend. With its innovative products, strategic partnerships, and expanding global footprint, WeRide offers a compelling investment opportunity in the autonomous driving sector.

The projected large-scale commercialization of its services by 2026 further cements its long-term growth trajectory.

Hsiao projected fiscal 2024 revenue of 645 million Chinese yuan and EPS loss of (6.19) Chinese yuan. The analyst expects fiscal 2025 revenue of 1.52 billion Chinese yuan and an EPS loss of (4.64) Chinese yuan. He estimates fiscal 2026 revenue of 4.62 billion Chinese yuan and EPS loss of (2.59) Chinese yuan.

Price Action: WRD stock is down 8.14% at $17.72 at the last check on Wednesday.

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