Mobileye Stock: Why I’m Eyeing MBLY N.V. Stocks
Mobileye Stock: Why Invest in MBLY N.V. Stocks
If you are an Invest Diva insider, you probably already know that the Mobileye stock is making interesting moves both from a technical and fundamental standpoint. While everyone else is distracted by Tesla (TSLA), Apple (AAPL) and Brexit, lets ditch the crowd and eye Mobileye (pun intended)! Without further ado, I'm gonna conduct a 360 Invest Diva Diamond analysis on this baby.
mobileye stock N.V. (MBLY) logo
1- Mobileye Stock: What the Heck is it?
Mobileye is an Israeli technology company that develops vision-based advanced driver assistance systems (ADAS), helping drivers keep passengers safe on the roads and decrease traffic accidents.
The company was founded in 1999 in Jerusalem by Professor Amnon Shashua and Mr. Ziv Aviram. Ever since its inception Mobileye’s goal is to develop and market vision-based systems providing warnings for collision prevention and mitigation.
Mobileye’s development center, located in Har Hotzvim, Jerusalem is the world’s largest machine vision development center and employs approximately 200 research and development employees. The company has offices in the Netherlands, the United States, Japan and Cyprus.
Cars that use Mobileye Products: At first the company developed algorithms, and a processor chip called the EyeQ chip. All of Mobileye’s proprietary image processing algorithms run on the EyeQ chip (get the name?!) After years of testing, the chip and software algorithms began to be sold as commercial products to original equipment manufacturer customers.
Mobileye’s technology has been implemented and launched by BMW on multiple production platforms: 5-Series, 6-Series, 7-Series, Volvo S80, S60, XC70, XC60 and V70 models, and GM on the Buick Lucerne, Cadillac DTS and STS.
Largest Israeli IPO in the US: In July 2014, Mobileye raised $890 million in its initial public offering in the U.S. Mobileye and existing shareholders sold 35.6 million shares for $25 each, above the high end of the marketed range upon IPO.
Range: Since going public, Mobileye stock reached the high of $64.40 in August 2015, but then dropped to the low of $23.57 in February 2016.
2- Mobileye Stock Fundamentals: Why Now?
Although we might be a tad late on reporting on this (after all, Invest Diva insiders get the competitive edge on being the first to know this $h#t!) it is not too late for you to learn about the fundamentals.
Despite bottoming out back in February, here are key fundamental advantages of Mobileye stock:
Fully autonomous cars are coming soon: Good news for long-distance drivers, drunk drivers and texting drivers. You will be able to fall asleep on your wheel very soon, as soon as legislation for self-driving cars loosens up a bit. While Mobileye will have drivers taking their hands off the wheel, fully autonomous cars—cars that can get you from Point A to Point B with no driver intervention at all—are hitting the markets sooner than you'd expect. And Mobileye technology will be at the heart of this world-changing technology.
Mobileye and its partner General Motors aim to overtake Tesla Motors (TSLA), Google (GOOG) and Nvidia (NVDIA) in collecting mapping data from self-driving cars. So between the four and especially if you already are vested in the latter three, adding MBLY to your portfolio could make a great diversification
Company has a competitive edge: Mobileye’s competitive advantage is in the software and their mapping capabilities. Mapping is the key to making cars driverless, and MBLY has won awards for an approach to maps that addresses safety, that should help in securing government regulatory approvals and in winning over consumers.
It is likely that the company holds up to its competitive edge because Mobileye is no stranger to beating out the competition and producing first-of-its-kind technology. For example, in 2010 Mobileye became the first company to design and implement a vision-based pedestrian collision warning system. In 2011, the company expanded this technology and designed the first forward collision warning system to be approved by the U.S. National Highway Traffic Safety Administration.
Growth set to accelerate in the years ahead: Thanks to Mobileye's competitive advantage in technology, investors should continue expecting profit margin to hold this year. Mobileye appears poised to meet its $1.1 billion in revenue by 2019 goal thanks to Road Experience Management (its REM database). This will raise EyeQ prices in the next few years. The company has a strong balance sheet thanks to its cash and zero debt. Its customer base includes all the major automotive manufacturers including GM (NYSE:GM), BMW, Nissan, and Volkswagen. It has 25 OEMs in its NCAP (New Car Assessment Program). As volumes grow along with ASP, Mobileye's stock price will respond in a positive way.
Advances in EyeQ continues, thanks to Mobileye hiring more engineers and investing in R&D. Its product mix of more expensive product will be more favorable in the near-term and over the course of the next few years.
Mobileye boosted operating expenses by 28 percent in 2015 due to R&D activities. This skewed the company's valuation metrics but profitability is improving.
Mobileye ranked among 'smartest' firms in world: The technology company was ranked sixth on a list of the world's 50 "smartest" companies published on Tuesday by MIT Technology Review. The first five spots were taken by Amazon, Baidu, Illumina, Tesla Motors, and Aquion Energy.
3- Mobileye Stock: Technical Analysis
Let’s face it, Mobileye stock was a horrible experience for investors from August 2015 all the way to February 2016. During this time, it dropped nearly 63%. However looking at the technical point of the Invest Diva Diamond, we found signals supporting the above fundamental points.
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Mobileye stock broke above the ichimoku cloud twice after clearly bottoming out at the 23 level back in February 2016. This time, the lagging line also broke above the cloud. The 50% Fibonacci at 43 acted as a resistance right before Brexit last week. We could see further drops in the coming weeks. However the the long-term potential looks to be aiming at 61% Fibonacci and above.
Mobileye stock technical analysis Daily Chart + Ichimoku + Fibonacci
Summary: The fundamentals and technical analysis both point to an upcoming rally. While Mobileye N.V. will be competing with some tough tech companies, the industry is still fairly young and there is a lot of room for growth.
Here are the important MBLY levels to keep an eye on:
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In other news, we had a fun time with kids in downtown Stamford at an Invest Diva-sponsored event over the weekend.
As the kids were inspired to draw local artists' paintings, the adults talked money and financial planning. See the pictures here!