Redmond, Washington-headquartered Microvision (NASDAQ:MVIS) is known for providing a technology known as lidar, or light detection and ranging. MVIS stock is among just a small handful of tradable pure lidar plays on the market right now.
Lidar systems, just to give you a quick primer, use laser beams to form a three-dimensional image of the surveyed surroundings.
That process creates a real-time map of the environment. On-board computers can then use this information to help navigate self-driving vehicles, for example.
MVIS stock isn’t a perfect investment, by any means. So, I’ll give you the pros and the cons, and hopefully the big picture will be favorable for the company and the stock.
A Closer Look at MVIS Stock
Would you believe that just 12 months ago, you could have purchased MVIS stock for just $1.50? Those days are in the rear-view mirror, and so is that rock-bottom share price.
Since that time, on three separate occasions, the bulls ran the Microvision share price to the $25 resistance level. This occurred in February, April and June of 2021.
This gives the MVIS stock bulls something to prove – a goal to reach for.
It also lends credence to the idea that Reddit users could push the share price above $25, as they may have been involved in the three previous rallies to that price point.
Now, for a couple of cautionary notes. First, MVIS stock has a five-year monthly beta of 3.94.
This means that the stock is known to be highly volatile, as it has historically moved almost four times as fast as the S&P 500.
Second, Microvision has trailing 12-month earnings per share of -18 cents. That’s not terrible for a stock that’s currently trading near $14 or $15, but it shows that there’s room for improvement.
Traders Celebrate the Results
On Aug. 5, the MVIS stock price increased by as much as 24% at one point. What caused the trading community to boost the stock on that day?
That was the day when Microvision released its second-quarter 2021 fiscal results.
The data wasn’t entirely positive, but apparently the market was willing to see the glass as half-full.
Reportedly, the company posted a quarterly adjusted net loss of 9 cents per share. That doesn’t sound great, but it did match Wall Street’s consensus estimate.
But here’s some good news. For the second quarter, Microvision reported generating $0.75 million in revenues.
That represents a 27% improvement over the year-ago quarter. Plus, it was slightly higher than the analysts’ consensus revenue estimate of $0.7 million.
Moreover, it appears that Microvision is in a solid fiscal position.
As evidence of this, the company ended 2021’s second quarter with $135.3 million in cash and cash equivalents. That’s much better than the $16.9 million recorded at the end of the fourth quarter of 2020.
Strategic Sales Strategy
Before making an investment in a company, it’s generally a good idea to hear what the CEO has to say.
That way, you can get a better idea of the company’s vision for its future, and how it will achieve profitability.
In Microvision’s case, you can read the second-quarter earnings call transcript to see what CEO Sumit Sharma is thinking about his company.
Personally, I like what Sharma had to say. According to the CEO, Microvision’s strategic sales strategy will focus on the “biggest volume opportunity in the lidar market we see coming from automotive OEMs and tier-one partnerships.”
And apparently, that opportunity will be in the niche of safety features for passenger vehicles.
Sharma cites a couple of statistics in support of this hypothesis. He reports that “About 24 million passenger vehicles are projected in 2024 to have advanced safety features, ranging from level two and higher.”
Beyond that, Sharma expects that number to increase to around 37 million vehicles by 2030.
Given Microvision’s leading-edge technology and competitive costs in this area, it’s reasonable to conclude that the company will be able to capture a sizable share of this emerging market niche.
The Bottom Line
If you’re looking for absolute perfection, you won’t find it with Microvision’s recent fiscal results.
What you will find, however, is a company and a CEO with a clear, data-driven vision.
Therefore, MVIS stock should be knocking at the door of $25 again, possibly even in the coming months.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.