Mobileye Global Inc (MBLY)

Mobileye Global Inc (MBLY) stock dropped by 24.55% a stark warning issued by the company regarding excess inventory at its auto customers, which is expected to result in a decline in revenue throughout the year. This sudden downturn in share value sent shockwaves through the market, with shares of the autonomous driving solutions provider Mobileye plummeting by 24.55%

• Intel's Majority-Owned Mobileye Sees Troubling Outlook: Mobileye, a company predominantly owned by Intel (INTC -0.38%) but also publicly traded on the Nasdaq under the symbol MBLY, released a press statement that painted a bleak picture for the year 2024. The warning comes as a stark reminder of the challenges faced by companies in the semiconductor sector.
• The "Bullwhip" Effect in Auto Chip Manufacturing: The semiconductor sector experiences cyclical patterns, with supply-demand fluctuations leading to "demand air pockets" when over-ordering occurs during supply constraints. This trend is now impacting the auto chip sector.
• Mobileye's Financial Outlook for 2024: Mobileye adjusted its Q4 2023 revenue projection to $634-638 million. For 2024, revenue is expected to decline by about 9%, ranging from $1.83 billion to $1.96 billion, with adjusted non-GAAP operating income dropping to $270-360 million.
• Excess Inventory and Challenging Prospects: Mobileye elaborated that through its planning process for the upcoming year, including discussions with Tier 1 customers to assess potential 2024 orders, it became aware of significant excess inventory at its customers, totaling approximately 6-7 million units of EyeQ® SoCs. This surplus inventory largely resulted from Tier 1 customers' decisions to stockpile in the Basic ADAS category due to supply chain constraints in 2021 and 2022, alongside lower-than-expected production at certain original equipment manufacturers (OEMs) during 2023.
• Anticipated First Quarter Struggles and Diminished Growth Prospects: Investors have been warned to expect a particularly challenging first quarter, with revenue predicted to decline by 50%. Mobileye management, however, anticipates a gradual recovery in the subsequent three quarters, with revenue stabilizing to roughly flat or experiencing modest growth in the mid-single digits compared to 2023. This outlook is significantly below the 24% growth rate previously anticipated by analysts for the current year. The unexpected turn of events has understandably rattled investors and led to the drastic stock decline experienced today.

Shares of Mobileye Global Inc (MBLY) dropped by 4.34% from $41.05 to $39.27 in the trading on Friday, December 1, 2023. The reason why MBLY is down today is due to the consensus recommendation from research firms and analyst reports:

• Analyst Ratings: Mobileye Global received a Moderate Buy consensus recommendation from twenty-one research firms covering the stock. While this is generally positive, it also means that some analysts might have expressed a less bullish sentiment, potentially leading investors to reassess their positions.
• Target Price: The average 12-month target price among analysts had been $48.82, indicating an expectation of future price appreciation. However, if investors believe that the stock's current price has already reached or exceeded this target, they might decide to take profits, leading to a decline in the stock's price.

Mobileye Global Inc. (MBLY) dropped by 5.30% from $41.49 to $39.29 in the trading on Monday October 9, 2023. The reasons why stock MBLY down today is due to conflict in the company's home country, Israel. Following Hamas’ devastating attacks on Israel and the retaliatory actions by Israel in Gaza, oil prices are higher by 4%. Pressure is seen on U.S.-traded Israeli businesses.