Mobileye stock faces worst day with more than 30% drop as price cuts in China force slashed outlook

By Emily Bary and Wallace Witkowski

Mobileye sees up to $170 million in fewer SuperVision sales in China

Mobileye Global Inc. shares were easily on track for their worst day in the 18 months the stock has traded publicly, after the autonomous-driving technology company implied Tesla Inc. price cuts were to blame for its slashed outlook.

Mobileye (MBLY) shares fell as much as 31% to an intraday low of $29.63, with its previous worst day being Feb. 24, when the stock finished the day down 8.6%. At last check, shares were down 23%. Meanwhile, the S&P 500 index was up 1.3%, and the tech-heavy Nasdaq Composite Index rose 1.9%.

Most recently, Tesla (TSLA) instituted another round of price cuts for cars sold in the U.S. last week, but in January, Tesla had cut vehicle prices in China for the second time in three months.

"The China electric vehicle market has been negatively impacted by meaningful pricing actions by a global EV OEM, reduction of government electric vehicle subsidies, and general economic weakness in the country," Mobileye said in a statement. "While order flows for our main current customer for SuperVision have improved in recent weeks, given the impact they have seen in Q1 and revised outlook for the year, we are updating our 2023 fiscal year guidance to reflect this development."

The company lowered its full-year forecast to a range of $2.07 billion to $2.11 billion in revenue, down from a previous forecast of $2.19 billion to $2.28 billion, and cut its adjusted operating income forecast to a range of $548 million to $577 million, down from a previous range of $577 million to $627 million.

The company said the up to $170 million reduction in forecast revenue was driven "solely" by lower expected sales of its SuperVision assisted driving system.

Chief Executive Amnon Shashua said in the release that Mobileye sees this as "a temporary issue that should not impact the potential for this business to accelerate our top and bottom-line growth as it scales, diversifies, and becomes more predictable with additional OEMs and vehicle launches."

Mizuho analyst Vijay Rakesh, who has a buy rating and a $39 -- down from $42 -- price target on Mobileye, said while there are challenges to SuperVision sales near term, the pipeline should broaden in the second half of the year and 2024 with new ramps from vehicle makers Geely and Polestar, and the naming of a new U.S. SuperVision customer in the second half of the year.

Mobileye posted a first-quarter net loss of $79 million, or 10 cents a share, whereas it posted a loss of $60 million, or 8 cents a share, in the year-earlier period.

On an adjusted basis, Mobileye earned 14 cents a share, down from 16 cents a share a year before, while analysts surveyed by FactSet were modeling 12 cents a share.

Revenue rose to $458 million from $394 million, whereas the FactSet consensus was for $455 million.

-Emily Bary

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04-27-23 1308ET

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