When Mobileye NV (NYSE:MBLY) opened its IPO last month, little did anyone expect it to surge at the rate at which it has been going and so meteoric has been its rise that Morgan-Stanley has officially stated that even a target of $100 seems well within reach now. It was Ravi Shanker on behalf of the New-York based bank who appeared on CNBC to justify why it had so much of faith on this Jerusalem based makers of driver assistance systems.
One of the first points that he quoted and reiterated several times was the lack of competition as far as Mobileye NV (NYSE:MBLY) was concerned. Being a new company, its deep entrenchment in technology ensured that it was likely to enjoy a good visibility over the next 3-5 years courtesy of using about 90% different technology systems as compared to other firms in the market. This translates into virtually no presence of any competition in the near future, thus spelling a phase of good fortune for the company.
If Mobileye NV (NYSE:MBLY) is able to retain its current profitability and pricing not to mention easy acceptance in a growing market like China, then Ravi Shanker’s following statement will not be far from truth –
“The path to $100 does not involve heroic assumptions. If MBLY can hold its own and just retain its current position, let alone make further inroads from here, the stock is likely to be closer to our $100 bull case.”
Overall increase in the share value of the company has been 9% since the previous month and there has been a substantial upsurge where the volume of shares being traded is concerned. Total rise in the Mobileye NV (NYSE:MBLY) stock is estimated at 28.2% within a month’s duration and this is sufficient enough to grant investors the confidence of watching their money grow.
Jason Ader, who is an analyst at William Blair & Co, summed up the sentiment very well when he said –
“It’s a pretty unique story with high growth and high profitability that distinguishes it from most of the tech companies you see that are growing 60 to 100 percent and losing money. It’s clearly a momentum stock right now, it’s a darling.”
This article has been written by Vinita Basu.
