2022 wasn’t a good year for stocks. Macro headwinds and economic uncertainty reduced investors’ risk appetite and led to massive selling in the market. No wonder IPO activities slowed this year, and shares of most of the companies that recently went public through the IPO route collapsed. Our IPO Calendar shows that 10 companies went public from September 27 to December 14. However, shares of only one company, Mobileye Global (NASDAQ:MBLY), have remained in the green. The rest all flopped.
The outperformance of MBLY stock puts it in the spotlight. Against this background, let’s examine why MBLY stock should be on investors’ radars in 2023.
Mobileye Global Stock Jumps 69%
Mobileye develops advanced driver-assistance systems (ADAS). Its stock began trading on the exchange on October 26. Further, based on its closing price on December 21, MBLY stock has gained about 69% from its IPO price of $21. Given the automation and digitalization in the automotive industry, demand for its products and services is likely to remain high.
During the most recent quarter, its top line increased by 38% year over year. Meanwhile, its strong backlogs indicate that the company will generate solid future volumes. MBLY’s new advanced ADAS product, SuperVision, continues to gain traction and contributes meaningfully to its growth.
Highlighting the success of SuperVision, Robert W. Baird analyst Luke Junk said, “Overall, we remain bullish on the glidepath for Mobileye SuperVision going forward, which alone drove low-double-digit sales growth this quarter.” Junk sees further upside potential for SuperVision.
The analyst is bullish about MBLY stock and expects the company to benefit from its premium ADAS offerings. Junk’s price target of $39 is based on ~37x his 2024E EPS plus $4/share for its autonomous mobility as a service (AMaaS) business. Though the valuation reflects a premium to the benchmark index, the analyst believes this is warranted.
Is MBLY a Buy, Sell, or Hold Right Now?
MBLY stock commands a Strong Buy consensus on TipRanks based on 13 Buy and three Hold recommendations. Furthermore, analysts’ average price target of $42.67 implies 20.3% upside potential.
Our data shows that insiders are bullish about the company’s prospects and have bought MBLY shares worth $16.6M. Further, retail investors holding portfolios on TipRanks are very positive about the stock.
Bottom Line
Mobileye is poised to benefit from the strong demand for its ADAS products and premium offerings. Moreover, positive indicators from analysts, insiders, and retail investors suggest that the stock could deliver attractive returns. However, investors should note that the ramp-up in sales of its SuperVision products could pressure margins in the near term.
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