TD Cowen has increased its price target for Mobileye (MBLY, Financial) from $15 to $18, affirming a Buy rating on the company's shares. This adjustment reflects Cowen's confidence in Mobileye's strategic approach in an unsettled market landscape.
The investment firm highlighted Mobileye's balance of cautious optimism within its recent beat and raise, suggesting a strategic alignment with current market conditions. Furthermore, Cowen maintained that Mobileye's guidance for 2025 takes into account potential weaknesses in the second half of the year, which they consider to be a prudent outlook.
This revision underscores Cowen's belief in the company's long-term potential despite short-term market volatility, positioning Mobileye as a strong investment opportunity for stakeholders.
MBLY Key Business Developments
Release Date: January 30, 2025
- EyeQ Volume Growth: 9% increase in Q4, up 3% from Q3.
- Operating Margin: 21%, nearly 5 points higher than Q3.
- Operating Cash Flow: $400 million for 2024, flat compared to 2023.
- Revenue Guidance for 2025: $1.75 billion at the midpoint, representing approximately 6% year-over-year growth.
- Adjusted Operating Income Guidance for 2025: $217 million, more than 10% growth year-over-year.
- EyeQ Volume Guidance for 2025: 32 million to 34 million units.
- Gross Margin Improvement: Expected to be about 1.5 points higher in 2025 compared to 2024.
- Operating Expenses for 2025: Approximately $250 million per quarter on average.
- Q1 2025 Revenue Expectation: Down about 11% versus Q4, with 25% of the full-year revenue guidance.
- Capital Expenditure for 2024: $81 million.
- Effective Tax Rate for 2025: Approximately 20%, similar to 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mobileye Global Inc (MBLY, Financial) reported a robust operating cash flow of $400 million for 2024, consistent with 2023 despite revenue and earnings declines.
- The company experienced higher-than-expected EyeQ volume from Chinese domestic OEMs, contributing to a 9% increase in Q4.
- Mobileye Global Inc (MBLY) continues to win new ADAS business with core customers and is seeing opportunities with new customers.
- The company has made significant technological advancements, particularly in AI efficiency, which are expected to enhance future product offerings.
- Mobileye Global Inc (MBLY) is progressing with customer engagements that are expected to lead to a steady cadence of announcements in 2025, consistent with their strategic goals.
Negative Points
- Mobileye Global Inc (MBLY) is taking a conservative approach to guidance due to uncertainties in customer forecasting, particularly with Chinese OEMs.
- There is a risk that Zeekr could choose to go with an in-house system for the Zeekr 009, which could impact Mobileye's volumes.
- The company is assuming a deterioration in Chinese OEM volumes due to low visibility, which could affect future performance.
- Operating expenses are expected to remain high, with an average of $250 million per quarter in 2025, potentially impacting profitability.
- The exact timing of advanced product design wins remains challenging to predict, which could delay expected revenue from these initiatives.
