ARBE - Arbe: Changing Regulations And Commercial Success Suggest Profits Are Approaching
2024-06-10 06:03:34 ET
Summary
- The NHTSA has mandated that all light vehicles sold in the US must have automatic braking systems from 2028 onwards, expanding the market for Arbe's radar technology.
- Arbe is expected to secure four major OEM deals this year, with potential revenue of over $600 million in 2029.
- Arbe faces strong competition from Mobileye in the high perception radar sensor market, but probably no one else.
The regulatory environment for automobile safety has changed; the NHTSA published a final ruling mandating that all light vehicles sold in the US must have automatic braking systems from 2028 onwards at speeds above 10 mph.
The ruling delivers a significantly expanded TAM for Arbe and sets a deadline for OEMs to start deploying Arbe's technology. Likely, most car manufacturers (perhaps excluding the luxury premium priced manufacturers) will have a choice of two systems. Arbe Robotics (ARBE) or Mobileye (MBLY).
With a massively improved TAM, an enforced deadline for decision-making, the existence of only one competitor, and Arbe's recent commercial technological validation, I am upgrading them to a strong buy....
Arbe: Changing Regulations And Commercial Success Suggest Profits Are Approaching