Analyst Ming-Hsun Lee of Bank of America Securities reiterated a Buy rating on Pony AI Inc. Sponsored ADR (PONY – Research Report), with a price target of $17.70.
Ming-Hsun Lee has given his Buy rating due to a combination of factors that highlight Pony AI Inc.’s potential for growth and profitability. Despite a challenging fourth quarter in 2024, marked by a decline in revenue and increased R&D expenses, the company is poised for significant expansion in its Robotaxi fleet. This expansion is expected to drive substantial growth in service sales, with a projected 180% year-over-year increase in 2025.
Furthermore, the launch of Pony AI’s 7th-generation autonomous driving system is anticipated to enhance profitability by reducing costs and improving the product mix. The collaboration with major auto manufacturers to develop new Robotaxi models is also a positive indicator of future growth. These strategic initiatives, coupled with the company’s proprietary Virtual Driver technology, underpin the Buy rating as Pony AI is expected to achieve better economies of scale and unit profitability in the coming years.