Mobileye (MBLY) Has 'Strong Showing' in Q2 - William Blair

William Blair analyst Jason Ader weighed in on Mobileye N.V (NYSE: MBLY) following the company's first quarterly report as a public company and called it a "strong showing."

Ader noted revenue of $33.7 million and non-GAAP EPS of $0.05 was ahead of the range provided in the IPO prospectus and slightly ahead of Street estimates. "Overall, the quarter was strong and we reiterate our high regard for the company's business model and future prospects," he said.

"With ADAS technology in the early stages of global standardization and the development of the much larger market of autonomous vehicles in view, Mobileye's business boasts a rare combination of strong secular demand, sustainable technological advantage, high profit margins, and financial visibility," Ader added.

He sees plenty of revenue growth ahead. "We believe Mobileye revenue could grow to well over $1 billion by 2020," the analyst predicts.

On valuation, Ader said a P/E-to-growth (PEG) is the most appropriate valuation method; the current PEG ratio on 2016 estimates is an attractive 1.1 times, versus the peer group PEG median of 2.0 times. Using a slightly different approach, they forecast non-GAAP EPS of $1.64 in 2018. Applying a 50-times P/E multiple on this level of earnings, shares would almost double over the next three years.

The firm maintained an Outperform rating.

For an analyst ratings summary and ratings history on Mobileye N.V click here. For more ratings news on Mobileye N.V click here.

Shares of Mobileye N.V closed at $46.97 yesterday.

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