Episode
Mobileye Stock: A Double Beat, a Raised Guide — and a 15% Drop. Bargain or Trap?
- Published
- Jul 25, 2026
- Duration seconds
- 912
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Summary
Mobileye Global (MBLY) Q2 2026 — Mobileye (MBLY), the dominant supplier of automotive vision (ADAS) chips, reported a Q2 2026 double beat: adjusted EPS of $0.19 crushed the ~$0.06 estimate and revenue of $508M beat ~$482M, with adjusted operating income +46% YoY to $155M (31% margin). But the stock FELL ~15%. Why? Revenue was flat YoY, GAAP was a small loss (~$0.03), and a one-time $93M Israeli R&D tax credit MORE than accounted for the entire operating-profit increase — core margin was ~12%, not 31%. Add a CEO transition (founder Amnon Shashua stepping aside to chairman), Intel's ~88% ownership overhang, ~$340M/yr of stock-based comp that nearly offsets the ~$390M TTM free cash flow, and a new, capital-intensive pivot to build its own robotaxi fleet (2027 launch). MBLY raised FY26 revenue guidance to ~$1.995B (+4-7%) and adj. operating income to $395M (includes the credit). With ~$1.44B net cash (~$1.76/share, zero debt) the balance sheet is a fortress, but real owner-earnings are near breakeven. On a reverse-DCF, the ~$5.1B enterprise value (~2.6x flat sales) prices in a wide range; our probability-weighted fair value is ~$8.50 vs ~$8.05 today. Our call: HOLD, 3/5 — a real beat, but flat and flattered. We're more cautious than the Street's ~$10.45 target (+30%). Mobileye (MBLY) is the eyes of the modern car — its EyeQ chips power the automatic braking and lane-keeping in ~200M vehicles, an estimated ~70% share of the driver-assist (ADAS) market across ~50 automakers (Intel still owns ~88%). Q2 2026 looked like a clean double beat: adjusted EPS $0.19 vs ~$0.06, revenue $508M beat ~$482M, adjusted operating income +46% to $155M at a 31% margin. Yet the stock DROPPED ~15%. The reason is in the fine print: revenue was flat YoY, GAAP was still a ~$0.03 loss, and a one…