Mobileye's Q1 Earnings Miss Analyst Expectations, Shares Plummet Amid Disappointing 2025 Forecast

Mobileye shares tanked after the self-driving technology company issued disappointing financial forecasts for 2025, with falling sales and earnings per share below expectations. The company reported lower-than-anticipated sales and earnings, with Wall Street expecting $480 million and 11 cents per share, respectively. The poor performance comes as the hype around self-driving technology has not benefited all companies in the sector.

Mobileye Global Inc. (MBLY), an autonomous driving technology company owned by Intel Corp. (INTC), experienced a significant decline in its shares after reporting disappointing financial forecasts for 2025. The company's revenue and earnings per share (EPS) expectations fell below analysts' estimates, leading to concerns about the hype surrounding self-driving technology not benefiting all players in the sector equally.

According to a report by Benzinga [1], Mobileye's fiscal fourth-quarter 2024 revenue declined by 23% year-on-year to $490 million, beating the analyst consensus estimate of $477.75 million. However, the company's adjusted EPS of 13 cents fell short of the analyst consensus estimate of 11 cents. The stock price took a hit after the earnings release, with Mobileye stock down 7.81% at $14.76 premarket at the last check on Thursday [1].

The decline in Mobileye's financial performance was attributed to a decrease in gross margin by 482 basis points (bps) to 49% and adjusted gross margin by 35 bps to 69% [1]. The adjusted operating margin also decreased by 18 percentage points (pp) to 21% due to the lower gross margin [1].

Moreover, Mobileye's revenue and adjusted operating income expectations for 2025 fell short of analysts' estimates. The company expects revenue of $1.69 billion to $1.81 billion, compared to the $1.944 billion analyst consensus estimate [1]. Additionally, Mobileye anticipates adjusted operating income to range between $175 million and $260 million [1].

The poor financial performance of Mobileye comes amidst growing concerns about the competitiveness of self-driving technology companies. According to a report by the Financial Times (FT) [2], the market for self-driving technology is expected to be worth $2.5 trillion by 2050, but only a few companies are expected to capture a significant share of the market.

In conclusion, Mobileye's disappointing financial forecasts for 2025 have led to a significant decline in its share price. The company's revenue and EPS expectations for the year fell short of analysts' estimates, leading to concerns about the competitiveness of self-driving technology companies in the market.

References:
[1] Benzinga. (2025, January 25). Intel-owned autonomous driving company Mobileye beats Q4 estimates, revenue drops 23%. Retrieved from https://www.benzinga.com/news/earnings/25/01/43337413/intel-owned-autonomous-driving-company-mobileye-beats-q4-estimates-revenue-drops-23
[2] Financial Times. (2022, September 26). Self-driving cars: The race is on. Retrieved from https://www.ft.com/content/0dca91eb-7a78-49eb-ae63-3b427e5104fa