ARBE - Arbe: Delay Is Not Failure (Downgrade)
2024-01-29 10:56:14 ET
Summary
- Arbe Robotics' share price has fallen over 75% since I first invested in early 2022.
- Arbe's radar technology may still be a market leader with clear advantages over other radar and competing technology.
- The company has faced delays in securing orders from customers, particularly in China and Europe, but has recently received preliminary orders worth $63 million.
I first wrote about Arbe Robotics ( ARBE ) in January 2022 as a Strong Buy, when the shares were priced at $8.58, and a fair value calculation from suggested they were worth $95 each. Since then, the share price has collapsed below $2, a fall of over 75%. In this article (my fourth on Arbe), I review the company's progress and conclude that Arbe has suffered significant delays to its timeline. However, the business is still likely to deliver all the promises it has made just 2 or 3 years later than initially forecast and, as a result, may be an excellent but high-risk opportunity.
The Technology
I covered the technology in detail in my first article. Still, in short, Arbe has one product, a radar on a chip designed for the Auto industry as a sensor for the various levels of Autonomous driving. Radar has advantages relative to the two leading competitive technologies of lidar and cameras. Radar is unaffected by weather conditions; it sees as well in dense fog, snow, rain, and bright sunshine as it does on any other day. Radar can be used over much longer distances (500m in Arbe's case) than the competition and provides four dimensions of view it measures horizontal and vertical angles, distance, and speed. Radar can see through many things; children behind bus shelters and dogs behind trees are the most commonly used examples. Its final advantage is cost; it is much cheaper than lidar....
Arbe: Delay Is Not Failure (Downgrade)