Mobileye (MBLY) stock crashes 25% after cutting forecast; BofA downgrades

Mobileye (NASDAQ: MBLY) significantly lowered its revenue forecast for 2024 and it now anticipates revenue to be in the range of $1.83 billion to $1.96 billion for the year.

This is below the analysis consensus estimate was higher at $2.59 billion.

Shares fell 25% in response to the news.

The company foresees an operating loss between $468 million and $378 million for the year. On the adjusted operating income front, Mobileye expects it to be in the range of $270 million to $360 million.

Looking at the first quarter of 2024, Mobileye anticipates a revenue decline of approximately 50% compared to the first quarter of 2023.

F1Q23 revenue came in at $458 million. Analysts were looking for $563.7 million in F1Q24 in sales.

“We expect revenue for Q2 through Q4 2024 on a combined basis to be roughly flat to up mid single-digits as compared to the same period in 2023, and we expect inventory at our customers to be at normal levels by the end of 2024," the company said.

The company attributes this expected decrease to lower-than-expected volumes in its EyeQ SoC business.

Mobileye has become aware of excess inventory at customers, noting that decisions by Tier 1 customers to build inventory in the Basic ADAS category in 2021 and 2022 contributed to this situation.

For the preliminary figures of the fourth quarter, Mobileye estimates revenue to be in the range of $634 million to $638 million, with adjusted operating income between $241 million and $247 million.

The Street consensus for F4Q23 revenue stands at 636.6 million.

Bank of America analysts cut their rating on MBLY stock to Underperform.

Deutsche Bank analyst Emmanuel Rosner pointed out that MBLY has not historically traded based on near-term estimates, but rather based on mid-term estimates.

'The outlook for 2025+ should theoretically not be impacted by nearly as much, since much of today’s issues are temporary," he wrote in a note.

"At the same time, we acknowledge this large 2024 warning by the company, with no advance notice of any building inventory issues, combined with a new cut to SV volumes, could raise some questions around MBLY’s visibility into its underlying demand, and could also impact the stock’s multiple."

By Senad Karaahmetovic

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