Mobileye (MBLY) stock plummeted on Monday morning after Vanessa Jeffries, a senior Jefferies analyst, initiated the autonomous driving company with an “Underperform” rating.
Based on a sum-of-the-parts valuation, Jeffries said MBLY would be fairly valued at about $8 only, a price target that signals potential downside of another 14% from here.
Jefferies’ bearish call slammed the brakes on the company’s recent rally. Mobileye stock sits nearly 40% above its year-to-date low.
Why Is Jefferies Bearish on Mobileye Stock
In her note to clients, Vanessa Jeffries cited several reasons for the bearish view on MBLY shares, including the company’s precarious revenue pipeline and unverified commercial scale.
Growth expectations for premium, high-autonomy offerings like Surround ADAS and SuperVision are heavily concentrated within Volkswagen Group (VWAGY).
This exposes Mobileye to a major structural risk, given VW has already committed to eventually bringing its autonomous-driving stack fully in-house.
Plus, MBLY’s robotaxi economics face deep skepticism: its pricing model, requiring a $40,000 upfront vehicle fee paired with a $0.20 per-mile recurring charge, remains entirely unproven at commercial scale.
Together, these factors jeopardize long-term hardware deployment and software-as-a-service SaaS monetization goals, the Jefferies analyst added.
Competitive Pressures Could Hurt MBLY Shares
MBLY’s modular, map-dependent architecture faces significant disruption from rivals like Wayve, which utilize cutting-edge, end-to-end artificial intelligence (AI) frameworks.
According to Vanessa Jeffries, this competition may even render the company’s traditional system- on-a-chip approach obsolete.
Reflecting these headwinds and a potential hit to Mobileye’s market share, she sees the firm’s EBIT (adjusted) coming in at about $550 million only in 2028, a bearish projection that sits nearly 10% below consensus estimates.
Note that Mobileye shares have a history of gaining just 2.1% in June, followed by more than 15% decline in July and another 13% in August, a seasonal pattern that makes them even less attractive to own in the near term.
What’s the Consensus Rating on Mobileye Global?
Other Wall Street analysts, however, seem to disagree with Vanessa Jeffries on MBLY stock.
The consensus rating on Mobileye Global sits at “Moderate Buy” currently, with the mean price target of over $13 indicating potential upside of nearly 45% from here.
