On Tuesday, Innoviz Technologies (NASDAQ:INVZ), a provider of LiDAR technology for autonomous driving solutions, maintained a Neutral rating with a steady $3.25 stock price target from Rosenblatt.
The decision comes in light of recent developments from Mobileye, a major player in the advanced driver-assistance systems (ADAS) market, which announced a strategic pivot away from developing next-generation LiDAR technology in-house, opting instead for third-party solutions.
Innoviz's line-of-sight LiDAR technology is now poised to play a significant role in Mobileye's ADAS offerings. The company's cost-effective solutions are expected to become the standard for Mobileye following their move to discontinue internal LiDAR development. This shift is likely to be advantageous for Innoviz as it aligns with the industry's broader transition to external LiDAR sourcing.
Rosenblatt's stance on Innoviz remains unchanged despite the potential for increased business from Mobileye. The firm continues to apply a 6x next twelve months (NTM) revenue per share multiple, which spans December 2024 to September 2025, to arrive at the $3.25 target price. This valuation reflects a cautious but stable outlook for Innoviz's financial performance in the coming year.
The company's technology, which is crucial for enabling various levels of vehicle autonomy, is expected to gain traction as the ADAS market evolves. Innoviz's LiDAR solutions are integral for functions such as obstacle detection and navigation, which are essential for safe autonomous driving.
In summary, while Mobileye's strategic shift could open up new opportunities for Innoviz, Rosenblatt's assessment of the company's stock remains at a Neutral rating with a price target of $3.25. The market will continue to monitor how Innoviz capitalizes on these developments and whether this will significantly impact its market position and financial growth.
In other recent news, Innoviz Technologies reported robust Q1 2024 earnings, with revenues reaching $7.1 million, surpassing the projected range of $5 million to $6 million. The company also managed to decrease its cash burn compared to Q1 2023, ending the quarter with a robust cash position of approximately $128 million.
Innoviz has made significant progress in its strategic realignment and collaboration with industry giants like Volkswagen (ETR:VOWG_p), Mobileye, and NVIDIA (NASDAQ:NVDA). However, Goldman Sachs (NYSE:GS) has downgraded Innoviz's stock from Buy to Neutral and lowered the price target to $1.00 from the previous $2.25.
This adjustment reflects Goldman Sachs' anticipation of a challenging environment for the lidar industry, which is expected to impact Innoviz's revenue and earnings per share (EPS) growth. Despite these challenges, Innoviz anticipates Q2 2024 revenues to be in the range of $4 million to $5 million, with the full-year revenue expected to be more robust in the latter half.
The company has also set targets to secure two to three additional programs and $20 million to $17 million in new non-recurring engineering (NRE) bookings for 2024.
Innoviz has been notified by Nasdaq that it no longer meets the minimum bid price requirement. The company has been granted a 180-day grace period to regain compliance with the minimum bid price rule. These are the recent developments in Innoviz's business operations.
InvestingPro Insights
In line with Rosenblatt's neutral stance on Innoviz Technologies, it is valuable to consider additional insights from InvestingPro to understand the company's financial health and market performance. Innoviz, with a market capitalization of $92.61 million, has been navigating a challenging environment, reflected by a significant revenue growth of 551.41% over the last twelve months as of Q2 2024.
This growth is remarkable, yet it is important to note that the company holds a negative gross profit margin of -18.84%, indicating costs that exceed revenues. Furthermore, the company's stock has experienced a notable decline, with a 1-month price total return of -22.21%.
InvestingPro Tips highlight that Innoviz holds more cash than debt on its balance sheet, which is a positive sign of financial stability. However, the company is not expected to be profitable this year, and analysts have pointed out concerns regarding its cash burn rate. Despite the potential for increased business from Mobileye, these financial metrics suggest that investors should approach Innoviz with caution.
For a more comprehensive analysis, InvestingPro offers additional tips on Innoviz Technologies, providing a deeper dive into the company's financials and market performance. Interested readers can find a total of 17 InvestingPro Tips, which further detail the company's financial position and future prospects at https://www.investing.com/pro/INVZ.
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