MBLY: Expanding OEM Wins And Software Revenue Will Drive Future Upside Potential

Analysts have nudged our Mobileye Global fair value estimate slightly lower, trimming it by about $0.41 per share as they balance cautious near term production and competition risks against rising OEM wins and longer term autonomous and software driven growth opportunities reflected in recent, mixed price target revisions across the Street.

Analyst Commentary

Street research on Mobileye reflects a split view, with some bullish analysts leaning into long term autonomous and software driven upside while more cautious voices focus on near term execution and production uncertainties. These diverging perspectives are flowing through to a mixed pattern of modest price target raises and cuts clustered in the mid teens to mid twenties per share.

Bullish analysts generally see Mobileye as structurally well positioned in advanced driver assistance and autonomous solutions, citing a growing pipeline of OEM wins, expanding mobility as a service initiatives, and the potential for higher margin, recurring software revenue to support multiple expansion over time. More skeptical analysts are tempering these growth drivers with concerns that recent earnings beats are incremental rather than transformational, that light vehicle production and competitive pressures could cap near term upside, and that consensus expectations beyond 2025 may still need to be recalibrated.

Overall, the current research tone suggests that valuation is being influenced by how much weight investors place on Mobileye's long term technology and software leverage versus nearer term auto cycle dynamics, competitive intensity, and execution risk around scaling autonomous platforms.

Bullish Takeaways

• Bullish analysts highlight increasing OEM program wins and autonomous development partnerships as evidence that Mobileye is deepening its integration in future vehicle platforms. They see this as supportive of sustained revenue growth and a premium valuation over traditional auto suppliers.
• Expansion of mobility as a service offerings and software enabled features is viewed as a key catalyst for higher margin, recurring revenue streams, potentially improving earnings visibility and justifying higher long term multiples.
• Some forecasts for 2026 and beyond are viewed as conservative, with expectations that consensus could move higher as tariff related headwinds moderate and onshoring or other mitigation strategies start to benefit profitability.
• Where price targets have been raised, bullish analysts are effectively underwriting an acceleration in growth into 2026. This view assumes that current program ramps and new autonomous solutions begin to contribute more meaningfully to both top line and operating leverage.

Bearish Takeaways

• Bearish analysts argue that recent beat and raise quarters are modest relative to broader auto sector strength. They suggest that upside surprise potential may be limited and that the stock could struggle to re rate without clearer evidence of sustained outperformance.
• Lowered targets in the mid teens range reflect concerns that past execution missteps and unresolved supply issues, including potential impacts from component partners, could constrain production volumes and weigh on near term revenue conversion.
• Uncertainty in global light vehicle production and a more competitive environment in advanced driver assistance and autonomous systems are cited as risks that could pressure pricing power, margin expansion, and ultimately the durability of Mobileye's growth thesis.
• Some cautious views assume that current market multiples may not be fully supported if electric and autonomous adoption curves prove slower than hoped. This would leave downside risk to valuation should investor sentiment on the broader auto technology cycle weaken.

What's in the News

• Signed a Memorandum of Understanding with VVDN Technologies to localize and offer Mobileye's ADAS technologies to India based automakers, aligning with India's safety regulations and Made in India and Atmanirbhar Bharat policy priorities (company announcement).
• The partnership will combine Mobileye's EyeQ based ADAS product roadmap and system expertise with VVDN's local engineering, testing, and production capabilities to accelerate localization and manufacturing readiness in India (company announcement).
• Planned localization includes key ADAS solutions built on the EyeQ family of chips and associated sensors, enabling faster time to market, customization for Indian OEMs, and support for export ready vehicle platforms (company announcement).
• Mobileye highlights more than 25 years of ADAS and autonomous driving experience and over 200 million SoCs shipped worldwide, positioning the collaboration as a way to deliver globally proven, AI enabled safety technologies tailored to India's rapidly evolving automotive market (company announcement).

Valuation Changes

• The fair value estimate decreased slightly from $19.35 to $18.94 per share, implying a modest downward adjustment to long-term intrinsic value assumptions.
• The discount rate edged lower from 10.25% to about 10.17%, reflecting a marginally reduced required return on capital.
• Revenue growth ticked down slightly from roughly 17.59% to 17.53%, suggesting a very small tempering of top-line expectations.
• The net profit margin increased marginally from about 7.71% to 7.72%, indicating a minimal improvement in long-run profitability assumptions.
• The future P/E compressed modestly from roughly 87.4x to 85.4x, signaling a slight reduction in the multiple applied to forward earnings.