Serve Robotics (SERV, Financial) has caught the attention of Cantor Fitzgerald analyst Andres Sheppard, who has begun coverage of the company with an "Overweight" rating and a $17 price target. Serve Robotics specializes in deploying autonomous robots, enhanced by artificial intelligence, to facilitate food deliveries in urban areas.
Sheppard highlights the advantageous unit economics and significant partnerships that support Serve's scalability and expansion potential. The company's technology offers a variety of applications that broaden its market reach. Cantor Fitzgerald anticipates that Serve's long-term per delivery fees will be set more competitively compared to typical courier services. Moreover, the company is expected to achieve a breakeven point for its robotic units in under two years, enhancing its financial appeal and economic viability.
SERV Key Business Developments
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Serve Robotics Inc (SERV, Financial) successfully built 250 new 3rd generation robots in Q1, keeping them on track to deploy 2000 robots by the end of the year.
- The company expanded its delivery capacity by over 40% and increased delivery volume by 75% during Q1.
- Serve Robotics Inc (SERV) launched in two new markets, Miami and Dallas, and plans to launch in Atlanta by the end of Q2.
- The company raised an additional $91 million in Q1, ending the quarter with $198 million in cash, providing financial flexibility.
- Serve Robotics Inc (SERV) maintained high delivery quality, reducing delivery failures by 65% compared to the previous year.
Negative Points
- Total cost of revenues increased by approximately $1 million due to start-up costs related to fleet scaling and new market launches.
- GAAP operating expenses rose to $13.5 million in Q1, up from $12.9 million in Q4 and $8.3 million in Q1 of the previous year.
- The increased share of early-stage operations and fleet revenues negatively impacted the overall revenue mix.
- Despite revenue growth, the company reported a GAAP net loss per share of $0.23 and a non-GAAP net loss per share of $0.16.
- The company faces ongoing challenges with supply chain management and tariff impacts, although they have managed to offset these costs so far.
