Mobileye Exceeds Second Quarter Earnings Expectations

Mobileye, a leading provider of driver-assistance technology that could be crucial in the development of self-driving cars, exceeded expectations with its second quarter earnings and raised its full-year guidance.

Mobileye designs and develops software, chips and related technologies for camera-based advanced driver-assistance systems (ADAS). The company’s software and EyeQ system-on-a-chip are designed to anticipate potential collisions with vehicles, pedestrians, cyclists, animals, debris and other obstacles. Additionally, its technology detects roadway markings, traffic signs and traffic lights. Mobileye’s technology is used in cars made by Tesla, Ford, GM and Honda, among others.

“The second quarter demonstrated continued strong performance, highlighted by new EyeQ3 launches and increased demand for existing programs,” said Mobileye CEO Ziv Aviram. “During the quarter, we saw further support for regulatory implementation of ADAS and continued customer interest in the adoption of autonomous driving. Looking forward, Mobileye will continue to develop innovative technologies to maintain our leadership position and benefit from the accelerating autonomous industry trends.”

In Mobileye’s earnings conference call, Aviram confirmed recent media reports that GM will add Mobileye’s technology to its Chevy Malibu.

“The Malibu is just one of a number of new EyeQ3 launches that continue the growing trends of camera-only autonomous emergency braking, which started last quarter with Audi Q7,” said Aviram. He also revealed that, “one of Latin America’s largest insurance companies, after a successful pilot test last year, is now purchasing our aftermarket solution to offer their fleet customers.”

Volkswagen recently added Mobileye to its list of strategic suppliers as part of its Future Automotive Supply Tracks (FAST) initiative. This move “could pave the way for Mobileye to become VW’s core vision systems supplier,” said Morgan Stanley analyst Ravi Shanker. “Mobileye and Delphi are the only ADAS suppliers that are part of VW’s FAST initiative, which we believe could put both companies in the position to become VW’s core ADAS suppliers. For Mobileye in particular, this could pave the way to vision ADAS dominance, over time.”

According to Volkswagen, the FAST campaign aims to “successfully implement joint technological innovations even faster than in the past and to realize vehicle projects worldwide even more efficiently and effectively.” The company explains that the 44 companies on the list, which includes Mobileye, were “chosen for their outstanding performance in their respective field of competence based on a systematic selection process.”

In a research note last week, RBC Capital Markets analyst Joseph Spak raised his price target on Mobileye to 68 from 62, with an outperform rating, saying, “Mobileye is a unique opportunity to invest in a company that is a leader in a market on the cusp of inflection.”

The Israel-based Mobileye is clearly experiencing great success, and if the company is able to position itself to hold vision ADAS dominance, it will ensure massive expansion in the future, considering the growing interest in autonomous and semi-autonomous vehicles.