Investing.com -- Jefferies initiated coverage of Mobileye Global Inc. (NASDAQ: MBLY) at “underperform” with a price target of $8, implying 24% downside from the prior close of $10.53, analysts said in a recent note.

The brokerage used a sum-of-the-parts valuation based on a blended 2027 enterprise value-to-sales multiple of 1.9 times across Mobileye’s product segments, arriving at an equity value of $6.51 billion, or $8 per share, against 816 million shares outstanding.

Net cash of approximately $1.59 billion was included. The implied price-to-earnings at the target price is 21.2 times.

"We see risk as skewed to the downside given structural threats and key customer dependence," Jefferies said, adding that "the stock’s re-rating ultimately depends on a small number of highly uncertain outcomes."

Mobileye, approximately 75% owned by Intel, holds roughly 70% market share in the global advanced driver assistance systems market.

Its share price has declined 75% over the past three years, with its enterprise value-to-EBIT multiple compressing toward those of Tier 1 automotive suppliers from prior growth-technology levels, per FactSet data cited in the note.

Jefferies forecast revenues of $1.98 billion in 2026, growth of 2.8%, rising to $2.24 billion in 2027 and $2.86 billion in 2028, representing growth of 15.2% and 29.2% respectively.

Adjusted EBIT margins are expected at 10.4% in 2026, 13.7% in 2027, and 19.2% in 2028. On fiscal 2025 actuals, revenue was $1.89 billion with adjusted EBIT of $280 million and a 14.8% margin.

Versus consensus, Jefferies sits broadly in line for 2026 and 2027 but 10% below on 2028 adjusted EBIT, at $550 million against $609 million. Adjusted EPS estimates are $0.27 in 2026, $0.38 in 2027, and $0.63 in 2028.

Net cash stood at $1.84 billion at end-2025. Jefferies forecasts this rising to $1.59 billion in 2027 and $2.16 billion in 2028 after a $591 million acquisition outflow in 2026 related to Mobileye’s purchase of humanoid robotics company Mentee Robotics for $900 million ($612 million in cash, the remainder in shares). A $250 million share buyback is also assumed for 2026.

The bear case centers on three structural concerns. First, Jefferies argues that mix-driven growth from higher-autonomy products, particularly Surround ADAS at an average selling price of $150 and SuperVision at $1,300, is already in consensus and heavily dependent on the Volkswagen Group, which has stated an ambition to bring autonomy capabilities in-house. Second, the VW/MOIA robotaxi rollout, while a near-term catalyst, carries uncertain economics.

Jefferies’ base case assumes a fleet of 1,000 active vehicles in 2027 ramping to 13,000 by 2029, generating $84 million and $530 million in robotaxi revenue for those years respectively, but flags Mobileye’s $40,000 upfront fee and $0.20 per mile pricing model as unproven at scale.

Third, end-to-end artificial intelligence architectures from competitors such as Wayve could threaten Mobileye’s map-dependent, modular system design.

The 12-month upside scenario of $14.80 assumes sales 15% above base estimates, a 15% EBIT margin in 2027, and a 3.5 times EV/sales multiple. The downside scenario of $5.80 assumes sales 15% below base, a 10% margin, and a 1.5 times multiple.