Mobileye Global, one of the world's largest manufacturers of autonomous driving technology, suffered a devastating Waterloo on Thursday, with its stock price plummeting by a quarter. The company revealed in its latest financial report that its customers have reduced their orders.
Mobileye was founded in Israel in 1999, with clients including Porsche, Volkswagen, and other companies. The company initially focused on producing collision avoidance technology and later expanded to achieve fully autonomous driving (FSD). Intel acquired Mobileye for approximately $15 billion in 2017, and then spun off Mobileye in 2022 for a spin off on NASDAQ.
Earlier on Thursday, the company's financial report showed that its initial performance over the past year was overall better than market expectations, but the key point is that the company's performance guidance for this year is not ideal.
Customers need to digest inventory
Mobileye pointed out that excess inventory has forced its customers to reduce orders in the first quarter.
At present, automobile manufacturers have excess inventory, which is because they have stockpiled a large number of Mobileye chips during the supply chain disruption caused by the COVID-19 pandemic, in order to avoid possible shortage of parts in the future.
Mobileye now states, "As concerns about the supply chain ease, we expect our customers to use the vast majority of past inventory in the first quarter of this year." The company added that it expects the situation to return to normal by the end of this year.
Based on this factor, the company expects its revenue to be significantly lower in the first quarter of this year than in the same period last year; This year's full year revenue will be between $1.83 billion and $1.96 billion, far below analysts' expectations of $2.58 billion; The annual operating loss is expected to surge to between $378 million and $468 million, higher than previous estimates.
On Thursday, the company's stock price in New York experienced a cliff like decline, with a drop of up to 24.55%, closing at $29.97 on the US stock market, with a market value evaporating approximately $8 billion.
Although chip suppliers in the automotive industry have also made similar inventory adjustments, there are few on the same scale as Mobileye.
Last November, another major automotive chip supplier in the United States, Analog Devices, also lowered its outlook and partly attributed it to weak demand from car manufacturers.
"Analysts and investors may have a slight hope that Mobileye will not be affected by inventory adjustments, but it turns out to be a mistake," said Pierre Ferragu, an analyst at New Street Research
Morgan Stanley analyst Adam Jonas gave Mobileye stock an equal weight rating, setting a target stock price of $37 per share. He said that investors may question the company's future trends, "rebuilding market confidence may take until the second half of 2024."