Mobileye NV (NYSE:MBLY) is a Jerusalem-based company that specializes in drive assistance software and hardware for automobiles. Mobileye had their IPO in the US in August. After an initial drop in share price, the company started gaining ground. Many analysts were optimistic about Mobileye and pushed up their target price. Morgan Stanley’s Ravi Shanker talked on CNBC about Mobileye and its future.
Shanker had earlier placed a bullish target of $100 on Mobileye NV (NYSE:MBLY) with an ‘Outperform’ rating, which is significantly above the current price of around $46 per share. Shanker thinks that there might be some competition that could possibly erode the market share and margins for Mobileye. He added that the next 12-18 months might be crucial for Mobileye, and if there is no new competition during that period, then he thinks that Mobileye might become a triple digit stock.
Continental AG and Bosch Ltd. are the two competitors that might come up with a product to compete against Mobileye NV (NYSE:MBLY), however, Shanker thinks that there is no imminent sign of such a move.
“Mobileye claims to have 80 or 90% share of the market. Conti and Bosch have the rest of it. They are taking a slightly different technological approach. They are going with stereo-systems rather than mono-systems. We don’t believe Conti and Bosch are going down the mono around just yet. […] We think there is a good chance eventually figured out. But nothing seems imminent from everything what we are tracking right now,” Shanker said.
The $100 target for Mobileye NV (NYSE:MBLY) is set by 2028. Shanker added that the company has good roadmap for the next 3-5 years with different products in their pipeline. Mobileye will have their products installed in 237 models of 20 different automakers by 2016. Shanker thinks that if there is no new competition in the next few months, then Mobileye might capture even bigger market share including companies like Volkswagen and Toyota Motor Corp (NYSE:TM). This might make it even harder for new competition to penetrate the market space.