Boston, MA 10/13/2014 (wallstreetpr) – Mobileye NV (NYSE:MBLY) is quite expensive at the moment, which is understood that even Tesla Motors Inc (NASDAQ:TSLA)‘s latest announcement didn’t help investors, but book profits. The shares of the company more or less, rallied entire last week, driven by Tesla Elon Musk’s tweet. However, on the day of final revelation, investors decided to go sell on the stock rather than buy.
Tesla Didn’t Help
Earlier this month, Musk had sent out a teaser tweet announcing about a new system. Following this tweet, the shares of Mobileye NV (NYSE:MBLY) received an instant boost pushing it to 52-week highs. Further, Tesla made an announcement last week that its current Model S cars will feature and ‘autopilot’ system along with a new ‘D’ trim. This will boost handling through addition of dual electric motors. The key takeaway of the announcement was that Mobileye is the suppilier for Tesla’s autopilot system, as expected.
Caution On
Mobileye NV (NYSE:MBLY)’s chip technology enables cameras to scan nearby areas and raise an alert if there is a possibility of collisions. The company added that is estimated nearly 160 Tesla cars to have the new feature by the end of this year. However, the announcement did not help the company’s stocks that fell by over 7% to $236.91. According to the Wall Street Journal, the company’s shares are currently expensively valued, two times its $25 price initial public offering. Thus, it makes more sense for investors to take their share of profit at this point of time.
Mobileye NV (NYSE:MBLY) revenues grew by over 90% year-over-year during the first half of the fiscal, while FactSet is confident that the sales will be brilliant in the next three years as well. Also, gross margins of the company too are well placed beyond 70% marks, but still the positives do not justify the current valuations. After the latest fall, the company is still trading at over 190 times its forward earnings.
