Innoviz: Buy For Lidar Market Leader With Significant Upside
May 04, 2022 11:31 AM ET Innoviz Technologies Ltd. (INVZ) LAZR, VLDR, VWAGY
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Summary
- Biggest design win yet for Innoviz is significant given it positions Innoviz as one of the market leaders in the lidar market.
- This will bring incremental volumes and much-needed scale to achieve a better cost structure for manufacturing and procurement, lower unit economics and ultimately provide customers with competitive prices.
- The recent design win is also the first for InnovizTwo, which is said to have 30x improvement in performance and 70% cost improvement from the InnovizOne.
- My 12-month target price for Innoviz is $7.80, implying 65% upside potential for Innoviz.
I have been following Innoviz (NASDAQ: INVZ) for some time and have been contemplating my views on the stock. However, with the recent happenings and wins at Innoviz, I am increasingly seeing Innoviz as amongst the market leaders in lidar and well positioned to grow within the Advanced Driver Assistance Systems (ADAS) and Autonomous Vehicles (AV) industry.
Investment thesis Overview
For those unfamiliar with Innoviz, the company is a market leader in solid state lidar sensors as well as perception software. These lidar sensors are high performance sensors that provides the eyes to automotive applications, as well as many other use cases like robotics, drones, mapping etc. Thus, the company's offerings brings autonomy in a safe manner.
Innoviz started off offering the InnovizOne, its first generation lidar sensor and in 2021, released InnovizTwo, its next generation lidar sensor and also its perception software that complements Innoviz's hardware.
Innoviz is led by founder and CEO, Omer Keilaf who is an Israeli. The company is founded in January of 2016 in Israel. Furthermore, since founding, Innoviz has received financial backing from both financial and strategic investors and partners, like Aptiv, Magna, Vertex Ventures, SoftBank Ventures Asia, just to name a few.
Biggest design win
One of the biggest and most positive news for Innoviz was the recent announcement made on May 2, 2022 before the market open. Innoviz announced that it was selected to be a direct lidar supplier for one of the world's largest vehicle groups across multiple brands. It was also announced that this agreement will increase the company's order book by $4 billion. This is very significant given that the total order book prior to this announcement was $2.6 billion, and thus the total new order book to date will be $6.6 billion, representing at 154% increase in the order book.
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