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On Thursday, Morgan Stanley (NYSE:MS) updated its outlook on Aeva Technologies Inc. (NASDAQ:AEVA), increasing the price target to $5.22 from the previous $4.87. The firm retained its Equalweight rating on the stock. According to InvestingPro data, AEVA’s stock has shown a significant 20% return over the last week, though it remains down 35% year-to-date.
The adjustment comes as the analyst overseeing the stock, Joseph Moore, acknowledged Aeva’s progress despite taking longer than expected to approach a significant increase in revenue since becoming a publicly traded company. Moore praised the company’s product execution and noted a second major OEM win, which he believes underscores Aeva’s potential to become a significant player in the market over the coming years. InvestingPro data shows impressive revenue growth of 110% in the last twelve months, though the company’s gross profit margins remain negative at -42%.
Despite recognizing risks to the company’s revenue trajectory, Moore pointed out Aeva’s advantages, including a market valuation of $167.6 million, a clean balance sheet with more cash than debt, and technology that is evidently proving its worth. He also mentioned a credible path to achieving more than $100 million in annual gross profit, which could lead to a strong performance in the stock, especially after a sharp year-to-date decline. For deeper insights into AEVA’s financial health and growth potential, investors can access comprehensive analysis through InvestingPro, which offers 12 additional key insights about the company.
Moore’s updated price target implies approximately a 70% upside from current levels, reflecting a positive bias toward the stock. However, he also indicated awareness of the wide range of possible outcomes and the potential need for additional funding. The updated price target is based on a slight increase to the base case multiple range, now at 1.1-4.3 times, up from 0.9-4.1 times. This change results from discounting Aeva’s projected 2027 revenue to 2025 at a 12% rate and applying a price-to-sales multiple consistent with a range of peers.
While optimistic about the long-term prospects of Frequency Modulated Continuous Wave (FMCW) LiDAR technology, Moore’s stance remains cautious due to the speculative nature of Aeva’s potential revenue streams, which is reflected in the Equalweight rating.
In other recent news, Aeva Technologies reported its financial results for the fourth quarter of 2024, revealing a full-year revenue of $9.1 million. The company aims for a significant revenue increase, targeting $15-18 million in 2025, which would represent a 70-100% growth. Aeva also announced strategic partnerships with Daimler (OTC:MBGAF) Truck and SICK AG, indicating a focus on expanding its market presence. The company unveiled its advanced Atlas (NYSE:ATCO) Ultra LiDAR at CES, which is expected to enhance its offerings in the automotive sector. Aeva’s non-GAAP operating loss remained unchanged at $123.2 million, but the company plans to reduce operating expenses by 10-20% in the coming year. With $237 million in available liquidity, Aeva is positioned to pursue its growth targets. Analysts from firms like Oppenheimer and Roth Capital have shown interest in Aeva’s progress, particularly in its industrial applications and manufacturing capabilities. The company expects to see increased momentum in industrial robotics and factory automation, with a projected 1000% increase in industrial sensor shipments in 2025.
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