Mobileye NV (NYSE:MBLY) is an Israel-based company, which makes software for driver-assistance systems. The company went public in August by selling around 35.6 million shares at $25 apiece. Inspite of the initial sell-off and the decline of the market, the stock managed to hold its place and started gaining. Itay Michaeli of Citi Research talked on CNBC about the company’s technology and the markets that Mobileye could penetrate in the future.
Mobileye NV (NYSE:MBLY) focuses mainly on the active vehicle safety software through their Advanced Driver Assistance System (ADAS). Many analysts forecast a 67% growth for the company by 2025, but Micheali mentioned that this might be a conservative forecast and the company could achieve even bigger growths. He pointed out that the 67% growth outlook was under the assumption that the active system of Mobileye might perform similar to other systems like seat belts and air bags.
Michaeli said that the company is migrating from ADAS and Active safety onto the autonomous safety systems. He added that the autonomous systems market is 2-3 times larger than the Active safety market and the autonomous systems might also give higher margins to the company, which was not factored into the 67% growth forecast.
“[…] 2025 revenue of over $3 billion,which is above consensus, still the fraction of what the addressable market is, of about $15 billion plus,” Michaeli said.
Michaeli also talked about the segment of market which was not considered as an growth option for Mobileye NV (NYSE:MBLY), which is the retrofit options. Retrofit options enable the upgrade of older vehicles with the Mobileye software. Michaeli thinks that the retrofit is a growth market and Mobileye might lead that market as well. Michaeli also likes the idea of combining the heads-up display with the after market camera devices, mentioning the planned launch of Mobileye’s EyeQ3 chip. Michaeli said that the company could see some additional growth through the personal navigation devices as well.
“[…] The main story with the Mobileye is still on the OEM side, but the after market shouldn’t be ignored either,” Michaeli added.