Aeva Technologies (AEVA): Exploring Valuation After $100M Apollo Backing and Smart Infrastructure Partnership Announcement

Aeva Technologies (AEVA) is making headlines after securing a $100 million investment from Apollo Global Management. The investment is aimed at accelerating the rollout of its 4D LiDAR technology. The company also revealed a new partnership with D2 Traffic Technologies, signaling active expansion into smart infrastructure across the US.

See our latest analysis for Aeva Technologies.

It’s been a wild ride for Aeva Technologies shareholders this year, with the company’s 1-year total shareholder return of 130.82% firmly outpacing its peers, even as the share price recently pulled back from its highs. After surging earlier in the year on rapid tech adoption news, recent momentum has cooled, as seen in the 30-day share price return of -40.36%, but the big picture still suggests long-term optimism in Aeva’s growing market reach and new strategic partnerships.

If Aeva’s push into smart infrastructure has you interested in industry trends, now’s a great time to explore See the full list for free.

With shares well below analyst targets but up dramatically over the past year, the key question for investors now is whether Aeva is trading at a true discount or if the market has already priced in its anticipated growth.

Price-to-Sales Ratio of 38.9x: Is it justified?

Aeva Technologies is currently trading on a price-to-sales (P/S) ratio of 38.9x. This is exceptionally high, especially considering its last close price of $9.81, and puts the stock at a premium compared to both industry peers and its own fundamentals.

The price-to-sales ratio measures how much investors are willing to pay for each dollar of the company's revenue. For growth companies like Aeva, a higher P/S might signal optimism about future revenue streams from new technologies. However, it also raises expectations that need to be met through substantial top-line growth.

Despite sky-high revenue growth forecasts, the current P/S multiple is significantly above the US Electronic industry average of 2.2x and even further above the peer group average of 5.7x. When compared to the estimated fair price-to-sales ratio for Aeva of just 1.4x, the premium looks hard to justify at this stage. The market could be pricing in aggressive upside. However, fundamentals would need to dramatically improve to support this level.

Explore the SWS fair ratio for Aeva Technologies

Result: Price-to-Sales of 38.9x (OVERVALUED)

However, continued negative earnings and high valuation remain key risks if revenue growth expectations are not met in the near future.

Find out about the key risks to this Aeva Technologies narrative.

Build Your Own Aeva Technologies Narrative

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A great starting point for your Aeva Technologies research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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