Mobileye shares plunge as full-year revenue forecast falls far short

Mobileye Global Inc. shares tumbled 24.55 percent, closing at $29.97 Thursday after the Israeli autonomous driving technology maker, and Israel’s most valuable publicly traded company, said in a preliminary earnings report Thursday that it sees full-year revenue for 2024 in the range of $1.83 billion to $1.96 billion.

The Jerusalem-based firm, which makes semiconductors and systems that power advanced driver assistance — known as ADAS — features, blamed its outlook on customers having built up inventories of ADAS chips in the wake of the pandemic. Mobileye said it expects they’ll work through that supply in the first quarter.

“We have become aware of excess inventory at our customers,” Mobileye said in the statement. “As supply chain concerns have eased, we expect that our customers will use the vast majority of this excess inventory in the first quarter of the year.”

Intel Corp. retains about an 88 percent stake in Mobileye, which it bought in 2018 for $15.3 billion and then spun off in an IPO in October 2022. Intel shares fell as much as 4.1% in premarket trading.

The full-year revenue forecast fell well short of Wall Street’s expectations and the results triggered downgrades from analysts; the average analyst estimate was $2.58 billion in revenue.

Wolfe Research’s Rod Lache cut his recommendation to peerperform from outperform. Brian Gesuale at Raymond James lowered his rating to outperform from strong buy and trimmed his price target to $48 from $50, saying revenue may take longer to materialize than Wall Street expects.

“The potential for negative estimate revisions could rob shares of a natural catalyst to boost shares sustainably higher in the near term despite a growing expectation that the company is poised to announce incremental customer wins,” he wrote in a note.

Mobileye shares rose 24% in 2023, and closed on Wednesday at $39.72. Of analysts covering the company, 23 have a buy-equivalent rating, five say to hold and none recommend selling.

The average 12-month price target is about $49.