Investor Reaction To Predictable Mobileye Earnings Was Negative: Analyst

Mobileye Global (NASDAQ:MBLY) stock fell on Thursday after it reported its fiscal second-quarter 2025 results.

The autonomous firm reported a quarterly revenue growth of 15% year-on-year to $506.00 million, beating the analyst consensus estimate of $463.26 million. Adjusted EPS of 13 cents topped the analyst consensus estimate of 9 cents. 

Mobileye raised its fiscal 2025 revenue outlook to $1.765 billion- $1.885 billion (prior $1.690 billion-$1.810 billion) versus the $1.770 billion analyst consensus estimate and adjusted operating income of $210 million-$286 million (prior $175 million-$260 million).

Also Read: Autonomous Driving Player Mobileye Stock Drops Despite Raising Outlook, Margin Growth

Reacting to the earnings report, Needham analyst Quinn Bolton reiterated a buy rating on Mobileye Global with a $18 price forecast. The stock continued its decline on Friday.

Mobileye’s second-quarter 2025 results aligned mainly with its July 9 pre-announcement. Still, Bolton noted that the market reacted negatively due to what appears to be a conservative fourth-quarter revenue outlook.

While third-quarter revenue guidance came in significantly above consensus, the analyst noted management adopted a cautious stance on fourth-quarter visibility.

His fourth-quarter revenue projection stands $20 million above management’s implied figures, suggesting room for upside if demand trends continue.

Bolton stated that the management noted that customer inventory levels align well with actual demand, reducing the risk of customers pulling forward orders in anticipation of potential tariffs.

He said Mobileye boosted its full-year revenue and operating income guidance, raising the midpoints by 4% and 14%, respectively. This reflects stronger-than-expected shipments: EyeQ volumes were revised upward to 33.5–35.5 million units (from 32–34 million), and SuperVision units are now expected to hit 40,000 (up from low-20,000).

The analyst modeled third-quarter 2025 gross margin at 68.2%, slightly down from second-quarter 2025 but still above Street expectations.

Shipments of ~9.7 million EyeQ units beat the analyst’s ~9 million estimate, supported by strong demand across OEMs, including China-based automakers.

Adjusted gross margin was 68.6%, slightly ahead of his 68.4% estimate and nearly matching the Street’s 68.8%. Operating expenses came in lower than expected at $241 million, driving adjusted operating income to $106 million, surpassing both his expectations and the top end of the preliminary guide.

Management emphasized 2027 as a pivotal revenue acceleration point, driven by broader adoption of SuperVision, initial commercial deployments of Connected and Autonomous Vehicles (CAVs), and expansion of its Drive platform, Bolton noted.

More than 19 vehicle models are expected to launch with Chauffeur and SuperVision by then, including major OEMs such as Audi and Porsche, the analyst noted.

Full-scale Drive deployments are planned across multiple U.S. and European cities beginning in late 2026. The CAV business, including Autonomous Mobility-as-a-Service (AMaaS), is expected to contribute $150 million in 2027 revenue—well below Street expectations—while ADAS revenue could reach around $2 billion, a conservative figure per the analyst.

Bolton noted that Waymo’s 25% market share in San Francisco supports the overall industry outlook. Mobileye cited partnerships with Volkswagen (OTC:VWAGY) (MOIA), HOLON, Uber Technologies (NYSE:UBER), Lyft (NASDAQ:LYFT), and European public transport providers. The company is supplying both operational tech and customer-facing software while transitioning to full production hardware for the ID. Buzz robotaxi, he noted.

As per the analyst, teleoperations are expected to begin in 2025, with driverless service planned for 2026.

Bolton noted that SuperVision shipments exceeded expectations, prompting a rise in fiscal 2025 guidance to 40,000 units from the previously estimated 20,000+.

The Zeekr 009 (NYSE:ZK) and Polestar 4 (NASDAQ:PSNY) models are driving near-term strength, with Audi and Porsche SOP (start of production) expected by year-end 2026 and broader ramps in 2027.

While management’s tone was cautious, the analyst noted upside in fourth-quarter revenue, improving margin visibility, and strong long-term positioning in ADAS and autonomous tech.

Despite conservatively guiding in some areas, the EyeQ strength, SuperVision traction, and robotaxi pipeline kept Bolton confident in Mobileye’s long-term growth trajectory.

Price Action: Mobileye stock is down 6.13% at $14.47 at the last check on Friday.

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