2024-01-05 17:04:00
Mobileye’s Disappointing 2024 Forecast Sends Investors into a Frenzy
Mobileye, a leading developer of Advanced Driver Assistance Systems (ADAS) and Autonomous Driving (AV) technologies, has left investors greatly disappointed with its initial forecast for 2024. The company’s fourth-quarter performance in 2023 looked promising, but the outlook for the upcoming year fell well below expectations, leading to a significant drop in investor confidence.
The company cited a large accumulated inventory of its products as the main reason for the disappointing forecast, with the most significant impact expected to be felt in the first quarter of 2024. Additionally, sales of the company’s advanced driver assistance system, SuperVision, are anticipated to be slower in 2024, with projected unit sales of 175-195 thousand, a significant decrease from the previous estimate.
The midpoint of the company’s forecast implies a 9% year-over-year drop in revenue and a 52% decrease in adjusted operating profit, painting a grim picture for the company’s financial performance in the upcoming year.
This disappointing news comes as a blow to investors who had been eagerly anticipating Mobileye’s future growth prospects. Bank of America had initially estimated average revenues for 2023/2024 to be $1.986 billion, representing a modest 6% increase from the previous year. However, following the weak forecast for 2024, the average operating profit is now expected to be $486 million, a 29% decrease from 2022.
In response to the weak forecast and moderate expectations for the autonomous vehicle industry, Bank of America has significantly lowered its target price for Mobileye to $22 from $47. The company’s customers also have an excess inventory of Mobileye’s EyeQ SoCs system, estimated to be 6-7 million units, further adding to the challenges Mobileye faces in the coming year.
Despite these challenges, Mobileye continues to be a major player in the ADAS and AV technologies market. The company’s results for the third quarter of 2023 showed a profit per share of 22 cents and revenues of 530 million dollars, exceeding Wall Street’s expectations. However, the weak forecast for 2024 suggests that the road ahead may be much tougher for the company.
The disappointing forecast and the implications for future growth have raised concerns among investors about the company’s ability to maintain its position in the market and deliver value to shareholders. Mobileye’s future performance will be closely monitored in light of these developments.
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