Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Microvision: Meme Status Insufficient for Growth

Stock MarketsSep 06, 2021 08:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Microvision: Meme Status Insufficient for Growth

Microvision (NASDAQ:MVIS) stock may still be down from the high prices it hit during the “meme stock” waves earlier this year. Yet is it time to "buy the dip" with this lidar play? Not so fast.

Why not? First, Microvision has yet to demonstrate that it's set to join the ranks of Luminar Technologies (LAZR) and Velodyne Lidar (VLDR). Both of these competing lidar companies have made greater progress in monetizing this technology.

Second, its popularity as a meme play continues to fade. With little backing its valuation but hope and hype, shares stand to experience big declines, once the speculators still holding it throw in the towel.

With more pointing to it falling back to its pre-meme prices, rather than bouncing back to its prior high, I’m bearish on the stock. (See Microvision stock charts on TipRanks)

MVIS Stock and its Lidar Prospects

With its usage in self-driving vehicle systems, lidar, or laser radar, is a technology set to explode over the next few years. Microvision may be smart in pivoting to this market. The problem? 

Unlike more established names in this fast-growing industry, like Luminar and Velodyne, this company still needs to demonstrate that it can turn its ambitions into tangible financial results. Both of these rivals are already generating millions in revenue. This company? It has yet to generate any revenue from its lidar endeavors.

Both of its competitors also have also established partnerships with leading automakers. Microvision? It’s yet to achieve this either. Given how far behind this company has fallen, its potential of finding success in this area, much less becoming a competitor to either Luminar or Velodyne, is debatable.

That’s what makes the current valuation of MVIS stock appear unsustainable, even after its pullback from as much as $28 per share, to around $15 per share today. Admittedly, there’s been a factor independent of its fundamentals that’s enabled its share price to see a tremendous increase in value. But as that factor continues to wane, chances are this stock will see further moves to lower prices.

Microvision’s Fading Meme Appeal Points to Further Declines

The valuation of MVIS stock is completely out of line with its underlying value. That's clear from its market capitalization of around $2.4 billion, against just $2.26 million in trailing twelve month revenue.

Of course, it’s not its fundamentals that enabled Microvision to reach the price levels it’s hit this year. It wasn't even really its lidar prospects themselves. So, what drove its turbo-charged move from mid single-digits, to the high twenties per share? Its status as a short-squeeze target of the meme trading community.

The issue now is that this meme popularity has long since peaked. Short interest has also come down. This reduces the chances that it will experience the “squeeze,” touted so widely on Reddit and other platforms. As meme speculation continues to dwindle, and more people on the short side cover their positions, the spread between its trading price and underlying value will continue to narrow. 

Secondary offerings have enabled Microvision to increase its cash position. Some may see this as something that could minimize declines once the meme investing trend stops being a factor. But this amount ($135.3 million) represents just 5.6% of its current market capitalization. That’s not to say the stock is at risk of falling more than 95%, down to a value on par with its war chest. Yet a high double-digit decline may still be possible, given the difficulty of assigning a value to its work-in-progress lidar business.

TipRanks Smart Score

MVIS stock has a TipRanks Smart Score of 6 out of 10 (Neutral). Sentiment among TipRanks Investors comes in at Very Negative. Blogger Opinions have been Bearish. Technicals are Positive, and Hedge Fund Activity has Increased in the past quarter.

Bottom Line: Investors could Skip this Lidar Play

It’s going to be years until lidar reaches critical mass. This makes even Microvision’s more established competitors, Luminar and Velodyne, risky plays themselves. In fact, both stocks have experienced big declines in recent months, as the market realizes the “pay off” for either one remains years in the making.

However, it’s more of a gamble here with MVIS stock. Only holding on due to what remains of its “meme stock” status, which is fading fast, investors could consider this a lidar play to skip out on.

Disclosure: At the time of publication, Thomas Niel did not have a position in any of the securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.

Microvision: Meme Status Insufficient for Growth
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (6)
Brendan Link
Brendan Link Sep 06, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You call yourself an analyst?
Brendan Link
Brendan Link Sep 06, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You call yourself an analyst?
Drew Heinze
Drew Heinze Sep 06, 2021 1:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I’ve seen better “analysis” from my toddler. This is a hit piece which fails to recognize Microsoft, Hololens 2, IVAS, IAA in Munich and many more. How can you claim we aren’t on Luminar or Velodyne’s level when you don’t list their specs, or ours? Just because you can’t explain and subsequently understand it, doesn’t mean it’s a meme stock funded by Reddit
Drew Heinze
Drew Heinze Sep 06, 2021 1:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I’ve seen better analysis from my 2nd grader. No mention of Microsoft, HoloLens 2, IVAS, three LiDAR models, the IAA conference in Munich etc. Nice hit piece, next time know you’re target before you shoot in the dark
Jay Pow
Jay Pow Sep 06, 2021 10:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yet another article FAILING TO MENTION THE MICROSOFT PARTNERSHIP FOR HOLOLENS 2 AND IVAS. Also failing to mention the presentation and unveiling of their LiDAR product line this week! And stock went above $20 on news before wallstreetbets even knew about it, so not a meme stock. Either malice or stupidity.
Gregory Fragkoulis
Gregory Fragkoulis Sep 06, 2021 8:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email