MBLY - Mobileye: The Bottom Might Be In But More Positive Signals Are Needed

2024-06-27 17:11:16 ET

Summary

• Mobileye's stock price has decreased significantly, making it potentially interesting for investors.
• The company's technology is promising in the context of Advanced Driver Assistance Systems (ADAS) and Autonomous Vehicles (AVs).
• Despite the stock's lower valuation, caution is advised and investors should closely monitor upcoming earnings reports before considering a purchase.

Despite its promising tech-focused business, Mobileye ( MBLY ) has not been able to gain from the technological trends. After the recent drop driven by the disappointing revenue outlook, the stock now trades at around the same level it was after its re-listing in October 2022. Even since my last article on MBLY from September 2023 , in which I gave Mobileye a Hold rating, the stock has declined almost 30%, making the following statement from there come true:

Mobileye has significant prospects, and the valuation is not as crazy as it might seem from the first glance at the multiples. However, the stock offers no margin of safety, and Mobileye has little room for mistakes.

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