The autonomous driving market is touted to grow exponentially over the next few years, and many companies are slowly spreading their wings into this industry. However, Mobileye (MBLY, Financial) is the only pure-play company in the sector, and investors looking to benefit from this industry don’t have any other option.
A leading supplier
Mobileye accounts for one of the leading suppliers of camera and sensor in the automotive industry. The company’s collision avoidance system is used by approximately 90% of the world’s top auto manufacturers. It is projected that the company’s technology will be used in almost 270 different models of cars. At present, around one-third of the automotive industry uses Mobileye’s mapping facilities.
Mapping services is the reason why the company wants to compete in the driverless car segment. Mobileye collects the mapping data from the cars with the help of its cameras and sensors, uploads it to the cloud and then sends it to other vehicles.
The company’s system is named Road Experience Management, and it can gather 10 KB of road-based data per kilometer. After collecting the data, it compares it with other mapped data uploaded to cloud so that the vehicle can assess its existing location and make judgments. On the other hand, Mobileye is presently gathering mapping data and strategies to launch the full system any time in 2018.
Road experience management
Mobileye’s management is aggressively immersed on evolving its technology with the automotive industry at the exact speed. Moreover, the company has fortified its strategy and technology compared to an assortment of viable claims extending from giant firms such as NVIDIA (NVDA) to small firms flaunting their deep learning skills and artificial intelligence to progress technologies.
The company’s sturdiest argument is grounded in the structure of supplier. Irrespective of the threats and precision about these new technologies like the Road Experience Management, or REM, backing autonomous driving, the company is continuously working on it and anticipates that it will deliver additional strong growth in the upcoming years. If the company is successfully able to beat consensus projection for its unit sales to OEMs, improved appreciation will probably follow.
Conclusion
Although Mobileye is slowly growing its presence in the autonomous car market, the stock is currently too expensive to buy. The company reported only $75 million in sales last quarter and has annual sales of just above $250 million. Despite that, the company commands a market cap of $8 billion. Investors should avoid the stock.
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