Waymo Raises $3 Billion In Extended Financing Round

Waymo, Alphabet’s (GOOGL) self-driving unit, has closed an extension of the financing round announced on March 2, raising a total of $3 billion.

The extension, in which funds and accounts advised by T. Rowe Price Associates, Inc., Perry Creek Capital, Fidelity Management & Research Company, and other external investors participated, raised a further $750 million for the company.

“As we continue to advance the World’s Most Experienced Driver™ — the Waymo Driver — we’ll use this injection of capital to deepen our investment in our people, our technology, and our Waymo One and Waymo Via operations” commented Waymo CEO John Krafcik.

“COVID-19 has underscored how fully self-driving technology can provide safe and hygienic personal mobility and delivery services” he added.

RBC Capital’s Mark Mahaney recently reiterated his GOOGL buy rating while ramping up the price target from $1,350 to $1,500.

“We believe the commercialization of Waymo could be a catalyst (though admittedly not in the near/medium-term)” says Mahaney.

“Our two long-term monetization scenarios for Waymo, developed with RBC Capital Markets, LLC ’s Auto Analyst Joe Spak, generate potential EVs of $119B-$180B” he added.

Overall, Mahaney sees GOOGL as a ‘top rebound stock’ company – with ’20E EBITDA down slightly Y/Y, but ’21E EBITDA at record highs. “We do view the GOOGL Long Thesis as well intact and would expect fundamentals (esp. Search ad revenue) to snap back when the economy recovers” he told investors on April 29.

Indeed, 33 out of 35 analysts who cover Alphabet rate the stock a buy- giving it a Strong Buy Street consensus. Their average analyst price target of $1,488 translates into upside potential of just over 8%. Shares are currently trading up 3% on a year-to-date basis. (See GOOGL’s stock analysis on TipRanks).