On Jul 4, Zacks Investment Research upgraded Mobileye N.V. MBLY to a Zacks Rank #1 (Strong Buy). With a strong return of 47.3% over the past one year and positive estimate revisions over the last 60 days, Mobileye is an attractive investment opportunity.
Why the Upgrade?
Over the past 60 days, 2 out of 3 estimates for fiscal 2015 were revised upward, pushing the Zacks Consensus Estimate up 15% to 23 cents.
The current optimism surrounding the stock can also be attributed to Mobileye’s encouraging first-quarter fiscal 2015 results reported recently. Revenues came in at $45.6 million, up 27.9% on a year-over-year basis. The results were primarily boosted by better-than-expected revenues from original equipment manufacturer (OEM) (up 15.1%) and after market revenues which contributed $9 million.
Non-GAAP net income per share also increased from 6 cents reported a year ago to 8 cents.
Mobileye provides essential components for the emerging advanced driver assistance systems (ADAS) market. Its EyeQ chip and software algorithms are used to take pictures of the route to be taken to determine lanes, vehicles, pedestrians, obstacles, traffic signals, congestion and other relevant information to assist the driver.
During the quarter, the company saw increasing adoption of its ADAS and autonomous vehicle which we believe will increase its global penetration.
Mobileye’s technology is already used by some of the leading car manufacturers such as BMW, General Motors Company GM, Ford Motor Co. and Tesla Motors Inc. TSLA. The company has won 80% of the serial production deals for its ADAS solution that it pursued. Mobileye is currently developing its driverless car technology which should get a boost from the higher safety standards being implemented worldwide. The company sells its products directly to OEMs and in the after-market to fleet management, insurance and leasing companies.
It is worth mentioning that in Aug 2014, Jerusalem, Israel-based Mobileye raised $890 million at $25 per share from an Initial Public Offering (IPO) — the largest by an Israeli company in the U.S. equities market. The company currently trades on the New York Stock Exchange.
Other than Mobileye, investors may look at Paylocity Holding Corporation PCTY, another Zacks Rank #1 stock in the technology sector.
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