Mobileye (MBLY) recently announced that it will stop the development of its next-generation frequency-modulated continuous wave (FMCW) lidars. LIDARs, or Light Detection and Ranging sensors, are specific sensors used to detect objects and measure distances. The provider of autonomous driving technologies made this decision as it seeks to streamline operations in response to uncertain market demand.
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Details of MBLY’s FMCW Lidar Technology
To elaborate, Mobileye is halting the internal development of its next-generation FMCW lidars. However, the company clarified that this decision will not affect any customer product programs or overall product development.
Moreover, the company added that it plans to wind down its lidar-focused research and development (R&D) unit by the end of this year. This move is expected to impact around 100 employees out of its global workforce of 3,700 as of December 2023.
Financial Impact of Discontinuing FMCW Lidars
In terms of financial implications, the operating expenses related to the lidar research and development (R&D) unit are expected to reach around $60 million in 2024, according to the company. Furthermore, Mobileye explained that the decision was influenced by several factors, including significant advancements in its EyeQ6-based computer vision technology and a clearer understanding of the performance of its internally developed imaging radar.
Additionally, the company cited better-than-expected cost reductions in third-party time-of-flight lidar units, further supporting its decision to discontinue FMCW lidar development. Despite this shift, Mobileye does not anticipate a material impact on its 2024 financial results. Looking ahead, the company will continue to focus on its in-house imaging radar, which remains on track for production next year.
Is MBLY Stock a Buy?
Analysts remain cautiously optimistic about MBLY stock, with a “Moderate Buy” consensus rating based on 10 Buys, seven Holds, and one Sell. Over the past year, MBLY has declined by more than 60%, and the average MBLY price target of $22.27 implies an upside potential of 86.4% from current levels.
