MBLY - Mobileye: Not Correctly Priced

2024-04-01 16:50:20 ET

Summary

• Mobileye Global has seen its stock rally despite warning of a major inventory issue and questionable demand scenario.
• The company expects a snapback in customer commitments for Q2 '24, with double the chip shipments sequentially.
• Mobileye's inventory numbers don't add up, raising concerns about the company's projected sales growth and valuation.
• The stock already trades at an expensive multiple of 10x '25 sales targets.

Despite a big warning for 2024, Mobileye Global Inc. ( MBLY ) has already started an irrational rally back up to previous highs. The ADAS company has run into a questionable demand scenario due to the clouds of a major inventory issue. My investment thesis remains Bearish on the stock following the big rally off the low, with too many questions to pay premium prices....

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