Since the onset of the COVID-19 pandemic, supply chain disruptions and restrictions on transportation have hampered the autonomous vehicle market. However, a steady transition from vehicle ownership to mobility-as-a-service (MaaS), growth in connected infrastructure, improved safety, and reduction in traffic congestion have bolstered the growth of the global autonomous vehicle market.
Despite the Ukraine-Russia war, which has resulted in bottlenecks in wire-harness supplies and worsened the shortage of semiconductor chips, the autonomous vehicle market is expected to grow with rising demand for self-driving cars and rapid adoption of advanced driver assistance systems (ADAS). According to Allied Market Research, the global autonomous market is estimated to reach $2.2 trillion by 2030, growing at a 40.1% CAGR..
Given the industry’s solid growth prospects, Wall Street Analysts expect the shares of fundamentally sound autonomous vehicle stocks TuSimple Holdings Inc. (TSP), Ouster, Inc. (OUST), and Velodyne Lidar, Inc. (VLDR) to skyrocket in price in the coming months.
TuSimple Holdings Inc. (TSP)
TSP in San Diego, Calif., is an autonomous technology company that develops autonomous technology specifically built for semi-trucks internationally and aims to produce a line of purpose-built (Level 4) L4 autonomous semi-trucks for the North American market. The company operates its Autonomous Freight Network (AFN) L4 autonomous semi-trucks equipped with its autonomous driving technology.
In January, TSP announced its collaboration with Hillwood, a leading industrial and commercial real estate developer, to combine TSP's infrastructure specifications into current and future industrial and commercial properties. The expansion of TSP's Autonomous Freight Network should enable Hillwood to actively prepare for meeting the demands of autonomous trucks by getting properties ready for autonomous trucking operations, starting with a million-square-foot state-of-the-art facility built within its 27,000-square-acre AllianceTexas development.
Also in January, TSP expanded its ongoing partnership with NVIDIA to design and develop an advanced autonomous domain controller (ADC) especially engineered for TSP's Level 4 autonomous trucking applications and to accelerate TSP's ability to put autonomous trucks on the Autonomous Freight Network (AFN) at scale with a production-ready computing solution. The ADC design will incorporate the NVIDIA DRIVE Orin system-on-a-chip (SoC), designed explicitly for AI-based autonomous driving applications.
In the fourth quarter, ended Dec. 31, 2021, TSP's revenue increased 178.2% year-over-year to $2.05 million. The cash and cash equivalent stood at $1.34 billion for the fiscal year ending Dec. 31, 2021, while its net cash provided by financing activities increased 264.4% from its year-ago value to $1.30 billion.
Analysts expect TSP's revenue to increase 214% year-over-year to $2.96 million for the first quarter, ending March 31, 2022. Furthermore, it has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
All nine Wall Street analysts that rated the stock rated it Buy. The 12-month median price target of $38.63 indicates a 185.3% potential upside. The price targets range from a low of $24.00 to a high of $54.00. The stock closed its last trading session at $13.54.
Ouster, Inc. (OUST)
San Francisco-based OUST designs and manufactures high-resolution digital lidar sensors and enabling software that offers 3D vision to machinery, vehicles, robots, and fixed infrastructure assets. Its product range includes OS, a scanning sensor, and DF, a true solid-state flash sensor.
Recently, OUST announced the launch of the Chronos chip, an automotive-grade, fully custom digital lidar silicon receiver that will power its DF solid-state sensor suite. Chronos chip is the DF architecture foundation that helps OST deliver performant, power-efficient, and compact digital lidar sensors that enable L2 to L5 automation in high-volume automotive series production vehicles.
And this month, OUST signed a strategic customer agreement with Third Wave Automation, a provider of multifaceted and effective autonomous solutions for the material handling industry. The agreement predicts over five thousand OS sensors through 2025 to equip robotic material handling vehicles with 3D digital lidar, a key component of Third Wave's autonomous driving sensor suite.
OUST's total revenue increased 85.9% year-over-year to $11.85 million in the fourth quarter, ended Dec. 31, 2021. Its cash and cash equivalent stood at $182.64 million for its fiscal year ending Dec. 31, 2021, while the net cash provided by financing activities grew 546.7% year-over-year to $257.80 million over the period. The company shipped more than 6,475 sensors in 2021, with more than 10,000 sensors shipped to date.
Analysts expect OUST's revenue to increase 87.6% year-over-year to $12.40 million in the first quarter, ending March 31, 2022. In addition, the company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 4% in price over the past month.
All four Wall Street analysts that rated the stock rated it Buy. Closing its last trading session at $3.89, the 12-month median price target of $12.75 indicates a 227.8% potential upside. The price targets range from a low of $8.00 to a high of $17.00.
Velodyne Lidar, Inc. (VLDR)
VLDR offers a real-time 3D vision for autonomous systems worldwide and provides surround-view lidar for autonomous vehicles, drones, security, mobile robots, mapping applications, and solid-state lidar for advanced driver assistance systems and autonomous applications. VLDR is headquartered in San Jose, Calif.
During the fourth quarter, which ended on Dec. 31, 2021, VLDR's total revenue amounted to $17.54 million. Its gross profit came in at $2.69 million compared to a $5.34 million gross loss in the previous year quarter. The cash and cash equivalent stood at $24.06 million for its fiscal year ending Dec. 31, 2021.
VLDR is expected to generate $74.01 million in revenue, representing a 46.5% year-over-year improvement in its fiscal 2023. Moreover, it has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
Of the seven Wall Street analysts that rated the stock, two rated it Buy, and three rated it Hold. The 12-month median price target of $4.98 indicates a 104.1% potential upside. The price targets range from a low of $2.00 to a high of $12.00. The stock closed the last trading session at $2.44.
TSP shares were trading at $13.39 per share on Monday afternoon, down $0.15 (-1.11%). Year-to-date, TSP has declined -62.65%, versus a -6.15% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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