Smarter & Volvo9 May 2020 01:13
Viktor still thinks seye have Volvo on the bag in their latest report.
'Redeye notes that Smart Eye's headline of the Q1'20 report was "Grand Slam in the DMS mid-level segment". We concur, and believe that most of the tenders have been completed, whereof the vast majority have been won by Smart Eye. We will not make any material estimate changes based on the report.
Sales and the operating loss came in at SEK 18m and -22m (expected 14m & -34m). Thus, the burn rate has decreased significantly, even though the temporary, short-term layoffs so far only should have had a limited effect. Cash amounted to SEK 111m, but the company reiterated that it is sufficient for more than 18 months ahead. The company also once again highlighted the major uncertainty around the Corona virus. However, we continue to believe that Corona is not an issue for a software company, whose major growth will take off a few years out, fully driven by regulation. When Smart Eye’s sales start to ramp we expect the Corona crisis to be over long ago.
As always, as a consequence of the nature of the business, the report was relatively bland. The most interesting in the report was that Smart Eye described its new, second OEM in China as one of China’s most important OEMs. We think it might be one of the big 4. If so, it would imply major volumes. Moreover, Smart Eye said its European premium customers are leaders in safety. We find it unlikely that iw would issue this statement without having Volvo in the bag.
We reiterate our base case of SEK 160, which implies an upside of over 80%.'
It's not over until the fat lady sings.
Sign In
Follow the stocks
