Mobileye Global’s (MBLY) stock rose nearly 4% in after-hours trading yesterday, after hedge fund Point72 disclosed a 5% stake. Point72 Asset Management, L.P., led by Steven Cohen, is one of the largest and most respectable hedge funds in the world. According to a 13G filing with the SEC (Securities and Exchange Commission), the fund acquired 5,052,323 shares of Mobileye Global Class A stock.
Point72’s Stake Could Boost MBLY’s Prospects
Mobileye offers autonomous driving technology and solutions. The Isreal-based company is on a path to create a safer and smarter driverless future by deploying advanced ADAS (Autonomous Driver Assistance Systems) technologies.
According to Thursday’s closing price of $14.82, Point72’s stake amounts to $7.49 million. An investment of this size by a notable hedge fund like Point72 could boost the future prospects for Mobileye, as many investors often try to replicate investments made by hedge funds. This act could also prompt other institutional investors to consider a stake in the company.
Some of the other hedge funds that already have a stake in Mobileye include Cathie Wood’s Ark Invest, Kenneth Tropin’s Graham Capital Management, and Theofanis Kolokotrones’ Primecap Management.
Insights from Mobileye’s Q4 Earnings Call
Mobileye has exceeded analysts’ expectations in seven of the eight past consecutive quarters. According to TipRanks Earnings Call Summary Tool, Mobileye saw more Highlights than Lowlights during its Q4FY24 earnings call. The Earnings Call sentiment was Neutral, reflecting a mix of positive developments and ongoing challenges.
The Highlights included better-than-expected EyeQ volumes (up 9% over Q3), a 5% improvement in operating margins over Q3, consistent operating cash flows of $400 million despite falling sales and earnings, significant new business wins, and continued progress in advanced product design.
On the other hand, the Lowlights included year-over-year decline in sales and earnings, a conservative outlook for Fiscal 2025 owing to deteriorating customer volumes, low SuperVision volumes assumption that impacted sales forecasts, and potential risks with key customers such as Zeekr (ZK) and Polestar (PSNY).
Is Mobileye a Strong Buy?
Analysts remain divided on Mobileye’s stock trajectory. On TipRanks, MBLY stock has a Moderate Buy consensus rating based on nine Buys, five Holds, and one Sell rating. Also, the average Mobileye Global price target of $20.13 implies 35.8% upside potential from current levels. Unfortunately, in the past year, MBLY stock has lost 47.8% due to the aforementioned headwinds.
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