Cyngn (CYN), a rising star in the autonomous vehicle technology sector, has grabbed investors’ attention, with its stock surging over 71% in the past week. Catering to influential clients such as John Deere and Rivian (RIVN), Cyngn plays a pivotal role in developing and deploying scalable autonomous vehicles. Despite a turbulent financial period, the reversal of fortune in stock price powered by the Alta (ALTG) partnership and a successful 1-for-100 reverse stock split demonstrates the company’s resilience and capacity for growth.
It is a high-risk, high-reward opportunity for investors looking for exposure to this emerging technology.
Cyngn Powers Autonomous Vehicles
Cyngn develops autonomous vehicle technology with software like DriveMod and Cyngn Insight. This software facilitates the development and deployment of scalable autonomous vehicles, and its growing clientele includes heavyweights like John Deere and Rivian.
The company recently partnered with Alta Equipment Group to expand its dealer network. Alta, a prominent construction and material handling equipment supplier, will begin selling Cyngn’s DriveMod Tugger, which combines Cyngn’s autonomous vehicle technology with Motrec’s MT-160.
Amid labor shortages, costly safety incidents, and spiraling eCommerce demands, Cyngn’s solutions, including advanced Teleoperations, address a market opportunity surpassing $268 billion; the company’s technology empowers businesses to integrate self-driving tech seamlessly into its operations, avoiding hefty upfront costs and preserving existing vehicle investments.
Cyngn’s Recent Financial Results
The company reported mixed results for the first quarter. Revenue was $5.5k, significantly missing the analyst’s estimates of $360,000 and showing a marked downturn from Q1 2023’s $872.8k. In terms of expenditure, Q1 2024 saw total costs and expenses decrease to $6.0 million from Q1 2023’s $6.7 million. This is mainly attributable to a $367.5k cutback in General & Administrative (G&A) expenses and a $502.9k decline in the cost of revenue, notwithstanding a $124.6k surge in Research and Development (R&D) expenses. Net loss for the period was $(6.0) million, compared to $(5.6) million in Q1 2023, with earnings per share (EPS) of -$0.08, outperforming the -$0.13 anticipated by analysts.
At quarter-end, the company’s cash and short-term investments totaled $4.8 million, compared to $8.2 million on December 31, 2023. Working capital and total stockholders’ equity came to $4.6 million and $8.0 million respectively. After the quarter end, Cyngn completed a public offering of its common stock, amassing $5.2 million, leading to adjusted cash and short-term investments, working capital, and total stockholders’ equity of $9.4 million, $9.2 million, and $12.6 million, respectively.
Recent Developments with CYN Stock
The stock has been trending downward over the past year and has shed 89%. However, Cyngn proceeded with a 1-for-100 reverse stock split in early July, aiming to increase the per-share market price and maintain the company’s listing on the Nasdaq Capital Market. This, plus positive news of the Alta partnership, has caused the shares to jump in value in the past few weeks.
The stock shows positive price momentum, trading above its 20-day (6.54) and 50-day (8.74) moving averages. It appears to trade at a relative discount to industry peers, with a P/B ratio of 1.63x, favorable to the Software Application industry average of 6.4x. The combination of positive momentum and undervaluation suggests further potential upside.
CYN in Summary
Cyngn demonstrates a promising growth potential. Recent financial results indicate the company’s resilience, underscored by a significant reduction in costs and expenses, leading to more favorable EPS than anticipated. A subsequent public offering increased working capital and equity, further bolstering financial stability. Despite shedding 89% of its value in the past year, the stock is rallying and appears undervalued compared to industry counterparts, hinting at continued growth potential.
The stock appears to be a high-reward investment opportunity for those who wish to capitalize on the growing autonomous vehicle technology market.
