MicroVision, Inc. (MVIS) develops and markets laser beam scanning (LBS) technology under the brand name PicoP. Its scanning technology can be used in products for interactive projection, consumer light detection and ranging (LiDAR), automotive LiDAR, and augmented and mixed reality. MVIS enables its customers to create high-resolution miniature projections, and three-dimensional sensing and image capture solutions.

Because MVIS and its Lidar technology will be indispensable in the autonomous driving space, which is expected to boom in the upcoming years, investors are (or should be) betting big on stock now.

MVIS’ intellectual property portfolio has been recognized by the Patent Board as one of the top 50 IP portfolios among global industrial companies. It has also been included in the Ocean Tomo 300 Patent Index, helping the stock to gain 806.9% over the past year. This impressive performance, combined with several other factors, has helped MVIS earn a “Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates MVIS:

Trade Grade: A

MVIS is currently trading above its 50-day and 200-day moving averages of $3.24 and $2.17, respectively, indicating that the stock is in an uptrend. In fact, the stock’s 251.3% gains over the past three months reflect solid short-term bullishness.

MVIS’ gross profit has  increased 172.4% year-over-year to $639,000 in the third quarter ended September 30, 2020. Its income from operations has increased 54.1% from the same period last year, while EPS rose 60% from its year-ago value.

Iin November, MVIS made important progress in the development of its first-generation MEMS Dynamic Scanning Long Range Lidar (LRL) sensor module. This will facilitate its development objective of producing hardware for demonstration and benchmarking, thereby meeting key automotive industry requirements.

Buy & Hold Grade: C

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers , MVIS’ positioning is not favorable. The stock is currently trading 31.1% below its 52-week high of $9.74.

Looking at the past three years, the stock has gained more than 300%, due  primarily  its partnership with Tier 1 automotive suppliers. However, the company’s total assets and revenue declined over this period, due to intense market competition and the company’s relatively lower market reach.

Peer Grade: C

MVIS is currently ranked #19 of 38 stocks in the Technology – Electronics industry. Other popular stocks in this industry are Amphenol Corporation (APH), Carrier Global Corp. (CARR) and Keysight Technologies Inc. (KEYS).

APH, CARR and KEYS have gained 21.2%, 217.6% and 28.4%, respectively, year-to-date. This compares to MVIS’ 831.9% returns over this period.

Industry Rank: A

The Technology – Electronics industry is ranked #11 of the 123 StockNews.com industries. The companies in this industry focus on manufacturing and distributing electronic components including semiconductors, connectors, electromechanical devices, and similar products.

A remote working lifestyle has bolstered the demand for technology related hardware because  people are increasingly managing their work and entertainment lives from  their desktop computers.   Also, an ongoing 5G transformation has increased the demand for semiconductors and electromechanical devices, as the whole world moves to adopt the new technology. With remote lifestyles likely largely here to stay, we think this industry is well-positioned to reach new highs over the next couple of months.

Overall POWR Rating: B (Buy)

MVIS is rated “Buy” due to its impressive past performance, short-term bullishness, and solid price momentum, as determined by the four components of our overall POWR Rating.

Bottom Line

Despite appreciating  more than 800% so far this year, MVIS has the potential to grow further based on its continued business growth, favorable earnings and revenue outlook, and price momentum.

Analyst sentiment, which gives a good sense of a stock’s future price movement, is impressive for MVIS. Its Average broker rating of 2 indicates a favorable analyst sentiment.

Analysts expect MVIS’ revenues to rise 6416.1% year-over-year to $202 million next year (ending December 31, 2021). The consensus EPS estimate for the ongoing quarter (ending December 31, 2020) indicates a 33.3% rise from the year-ago value. This outlook should keep MVIS’ price momentum alive in the near term.

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MVIS shares were unchanged in after-hours trading Tuesday. Year-to-date, MVIS has gained 777.78%, versus a 17.57% rise in the benchmark S&P 500 index during the same period.

About the Author: Rishab Dugar

Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...

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