We came across a bullish thesis on Innoviz Technologies Ltd. (NASDAQ:INVZ) on The Net Worth Club’s Substack by Danny Brody. In this article, we will summarize the bulls’ thesis on INVZ. Innoviz Technologies Ltd. (NASDAQ:INVZ)’s share was trading at $1.80 as of Jan 2nd.
A fleet of autonomous vehicles driving down a sun-drenched highway.
Innoviz Technologies (NASDAQ:INVZ), an Israeli company specializing in LiDAR sensors and perception software for autonomous vehicles, went public via a SPAC transaction, which typically raises concerns due to the speculative nature of such deals. However, several years post-SPAC, Innoviz has shown signs of stabilization and improvement, presenting a compelling turnaround opportunity. Initially listed at a $1.4 billion valuation, a figure inflated by the SPAC process, the company has since seen its stock decline significantly from its peak of $18 to its current price under $0.70, resulting in a market cap of around $115 million.
Despite this steep drop, recent trading activity and a renewed interest from analysts suggest that the stock may have bottomed out. Innoviz’s revenue has fluctuated, typical for a young, scaling company, but there are signs of positive change. The company’s net income is improving over time, driven by efforts to reduce costs, pay down payables, and enhance operational efficiency. The narrowing of cash flow deficits is an encouraging sign, suggesting better financial health and management. With approximately $45 million in cash and cash equivalents, Innoviz has a solid runway for its near-term operations, which is crucial as it continues to execute on its long-term growth strategy.
Although the company’s EPS remains negative, the trajectory is positive, with losses per share decreasing both year-over-year and quarter-over-quarter. Analysts have issued price targets with the average sitting at $1.77 per share, indicating a significant upside potential from current levels. Innoviz’s technology, including solid-state LiDAR sensors, holds substantial promise for the autonomous vehicle industry, enhancing safety and autonomy. While risks remain, the company’s improving financials and the potential of its innovative technology make it an intriguing long-term investment opportunity for those willing to bet on its successful turnaround.
Innoviz Technologies Ltd. (NASDAQ:INVZ) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held INVZ at the end of the third quarter which was 6 in the previous quarter. While we acknowledge the risk and potential of INVZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INVZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.