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These had ASPs around $250k AUD years ago when just one or two installed. Inflation mixed with exclusivity and volume probably results in ~$100k? Or do you think more? The tech isn't any less important. Maybe 200k or more still?
This stock market is currently being driven mostly by liquidity. Longer term, fundamentals always matter. But short term, this stock is a relatively illiquid micro cap that is not currently profitable... those are not the characteristics of a near term outperformer.
I still own a boatload, but realize that this is probably a CY2024-CY2026 story. My price target is 30p or higher by the end of 2025.
One might say, why hold through that period? That will kill your IRR. Good point! I suspect some are exciting now in the hopes of getting back in before the train leaves the station... But SM could also be acquired any day (above 11p, probably needs 20p to get board to agree). They are also likely to win/announce some big contracts (rumors good enough). They could announce intentions to list on NASDAQ (by end of CY2024). Aviation deal could occur any day eliminating all doubt of being fully capitalized to becoming free-cash-flow positive.
I'm a long term investor. This is speculative but it's also almost completely de-risked. Essentially a 20 year old startup finally entering its "hockey stick" inflection point.
Moreover, Bard says that "during 2022, the global automotive industry produced 92.1 million vehicles. Of these, 25.3 million were produced in North America and 19.3 million were produced in Europe."
Let's go recession results in 40 million cars (NorthAm and Europe), assume 40% require/ carry DMS within two years (conservative given Europe is 100% by then) and SEE gets about 40% market share (conservative but "show me"). That's 6.4 million cars. ASPs of $8 result in more than enough revenue for SM to break even. But this high level forecast gives no credit for Fleet or aviation or CAT royalties.
This stock is simply caught up in micro-cap hell.
Only thing I would add... we only need 178k (879k on the road) for the quarter to show at least some acceleration in growth from the prior quarter's 25.3%
That would be my low end bogey. But I think the 200k is a good over/under
It does not take herculean assumptions to get to a revenue run-rate of $200 million (USD) by the end of 2026 (this means $50+ by calendar 4Q'26)... assuming $8/car (conservative), $20/month fleet monitoring, and small contributions from CAT royalties and Fleet hardware. Assumes nothing from Aviation (conservative). Assumes nothing from consumer (conservative). They'll also be cash flow positive before that and net income before too.
YOU pick the multiple. Discount back to today.
One could make the case for a revenue multiple of at least 4x. Mobileye sold to Intel years back for nearly 20x.
I'm pretty sure I remember Paul saying 8 weeks more than once...
25% growth from the prior quarter would get us to 175k. This hopefully proves conservative. Paul talked about doubling annually through 2025... that looks easy in my opinion.
The ironic thing is that there is a high probability that IF the price ever gets above 13p again, it is on its way to a much higher terminal price. I do not know if I will have the "diamond hands" necessary to hold much above that level.
My personal price target if you use $8 per car gets you north of 50p sometime during 2027. I've been investing for 30 years now and have watched many of my investments become 10-baggers AFTER my exit. I honestly will need to sell chunks along the way but really do see s credible path to a really high share price. There are now probably too many shares for the market to ever value us at a pound, but half of one very reasonable it will just take a few years of executing...
GLA
One more point that I keep in back of mind... I was buying SEE aggressively when SmartEye had a greater market capitalization than SEE. Today, SEE market cap is nearly double that of SmartEye. This is the market "weighing" the two. I think if SEYE expects to be a multi-bagger, it's logical to conclude that SEE COULD BE A MULTI-MULTI-BAGGER.
Time will tell. I am secretly excited to watch our industry (and favorite DMS company) grow through this upcoming global recession.
This is probably one of the top-3 most important UNKNOWNS for Seeing Machines. Is Qualcomm a friend or foe? It would be very helpful to better understand the potential with QCOM and risks of them becoming a foe.
Over the years I've heard a lot of chip players mentioned alongside SEE: Qualcomm, Intel, Xilinx, Ambarella, Omnivison, recently Mobileye. I'm surely missing some but also don't understand who's good or bad or exclusive or temporary or future competitors etc.
I remain optimistic. Accumulated a little more around 6.3p. I still think 11p should be a "magnet" for the price - if not for all this macro stress
The way this probably ends up happening is in conjunction with an IPO on NASDAQ. Old shares can become new shares at a specific conversion ratio. Yours is a good start: 1 for 10 (or 20) shares, then IPO at some number over $10/ share. Then hopefully next stop = the moon.
From a research note on MBLY:
SuperVision Update: SuperVision has gained design wins into 6-7 auto makers, nine brands, and management feels good about volume doubling in 2023 supported by growth from Zeeker and two more Geely brands in the second half this year. Progress appears to be tracking well, and we came away with the impression that the business will drive upside in longer term models. Chauffer (~$6,000 ASP), which is an eyes-off system that can be added to current SuperVision Customers is being discussed in virtually every SV discussion as customers are looking to include scope for follow-on Chauffer solutions.
MGA’s acquisition of Veoneer’s ADAS business is more than just a hardware/engineering bolt-on. We see value in a trusted hardware integrator to provide a ‘path’ into the car for software/advanced silicon players (Apple, MBLY, etc.). In the battle for autonomy, there’s value in being ‘Switzerland.’
This morning, MGA announced the acquisition of Veoneer Active Safety business from SSW Partners.
We (Morgan Stanley) offer key thoughts below:
Transaction Details: MGA will acquire Veoneer Active Safety from SSW Partners for $1.525bn in cash, with the deal expected by the company to close near mid-year 2023. The transaction will be funded with cash on hand, and a modest amount of additional debt with MGA expecting no significant change in leverage profile or financial flexibility. The company expects the deal to be neutral to adjusted EPS in 2024 (first full year of integration), with $70mn+ of anticipated annual synergies by 2025 across key areas of procurement, SG&A, and development activities.
What technologies does MGA get from the acquisition? Veoneer Active Safety technology includes radar systems, camera systems, domain controllers, and driver monitoring. These technologies not only compliment some of MGA's existing offerings, but also increases areas of the car in which MGA can compete, increasing CPV opportunities and becoming even more of a 'one-stop shop' for OEMs ADAS needs.
Financials: MGA expects Veoneer Active Safety sales to be approximately $1.1bn in 2022,growing to $1.9bn by 2024. Pro-forma with MGA's existing business, MGA expects approximately $3bn in MGA Electronics revenue in 2024. Based on the revenue forecasts provided by MGA, they paid ~0.8x FY24 sales for a business growing at >30% on the top line and that is expected to be EBITDA positive in FY23. Pro-forma leverage for MGA should remain near 1x (FY23) assuming Veoneer ADAS slightly EBITDA positive and no synergies.
How does the acquisition fit within MGA? Consistent with the company's own statement, we view the acquisition of Veoneer Active Safety as in line with MGA's Go-Forward strategy, focusing on investments in high-growth areas. The deal should strengthen MGA's existing ADAS sensor and full system capabilities, while also adding significant resources (2.2k engineers, including 1.8k for systems, software and sensor development).
Our View: While we look for more details around the financial profile of Veoneer Active Safety closer to/upon closing of the deal, we believe MGA is well positioned to play 'Switzerland' in the ADAS/Connected Car battle that will play out over the coming decade and believe this acquisition fits well into that strategy.