Mobileye’s (MBLY) Rocky Road to Earnings: Can the Stock Regain Momentum?

Mobileye Global Inc. (NASDAQ:MBLY), a prominent player in the autonomous driving technology sector, finds itself at a critical juncture as it prepares to release its latest earnings report tomorrow. The Mobileye stock, currently trading at around $14.63 in premarket hours, has experienced significant underperformance this year, down 28.52% year-to-date, raising concerns regarding its near-term prospects.

MBLY is trading 2.21% higher in the pre-market, following a 4.73% pullback during yesterday's session, that saw broader markets down.

Analysts estimate an EPS of $0.09 for the current quarter, with projections of $0.06 for the next quarter, $0.35 for fiscal year 2025, and $0.43 for fiscal year 2026. Markets will be keenly focused on whether Mobileye can meet or exceed these expectations, as well as any revisions to forward guidance. Any significant deviation from these estimates could trigger substantial stock price movement.

Analyst ratings present a divided outlook. JPMorgan, in January 2025, maintained an “Underweight” rating with a price target of $10.00, citing a 43% stock decline over the past year due to shifting market sentiment, despite stabilization in automotive sales.

RBC Capital, on the other hand, holds a “Sector Perform” rating, increasing its price target from $11.00 to $14.00 in December 2024, driven by optimism surrounding potential deals with premium OEMs for Level 2+ and Level 3 autonomous driving systems. However, RBC emphasizes the need for formal contract announcements to justify its more bullish stance.

Mobileye's recent financial performance has been inconsistent. The fourth quarter of 2024 saw the company miss earnings expectations, reporting an EPS of $0.13 against a forecasted $0.21 and revenue of $490 million, falling short of the projected $670.9 million. This led to an immediate dip in the stock price.

However, the second quarter of 2025 presented a more positive picture, with revenue reaching $506 million, a 15% year-over-year increase, surpassing analyst estimates. Adjusted EPS also beat expectations, coming in at $0.13. This growth was fueled by a 28% increase in EyeQ volumes, prompting the company to raise its full-year 2025 revenue guidance to $1.765-$1.885 billion.

Mobileye has been actively forging strategic partnerships to expand its market reach. A significant win was securing its first Surround Advanced Driver-Assistance Systems (ADAS) design with Volkswagen Group. Furthermore, the company is collaborating with Lyft to launch self-driving taxis in Dallas by 2026, with future expansion plans, highlighting the real-world applicability of its technology.

While the prevailing sentiment leans towards caution, a closer look reveals potential for upside. Mobileye's technology remains at the forefront of the autonomous driving revolution. The recent underperformance may be an overreaction to short-term financial hiccups, overlooking the long-term potential of its partnerships and technological advancements. The market may be underestimating the value of Mobileye's proprietary EyeQ system and its growing ecosystem of ADAS and autonomous driving solutions.

Furthermore, the company's strategic focus on partnerships, rather than going it alone, could prove to be a more sustainable and capital-efficient approach in the long run. A strong earnings report could quickly shift market sentiment and propel the stock higher, rewarding those who dared to see beyond the current pessimism.

Mobileye stands at a pivotal moment. Its ability to execute on its strategic partnerships, demonstrate consistent financial performance, and secure new contracts will be crucial in determining its future stock trajectory.