Foresight Autonomous Holdings Is a Bet on Autonomous Cars, But Against Lidar

With electric cars now going mainstream, autonomous vehicles are the next big bet on the future. Advanced sensor technology like lidar has been seen as one of the keys to self-driving technology. However, not everyone agrees. Israeli automotive sensor technology company Foresight Autonomous Holdings (NASDAQ:FRSX) is betting against both lidar and radar. Instead, the company is focusing on camera-based object detection. A recent series of wins for Foresight’s technology has the attention of investors. As a result, FRSX stock is up 840% since mid-November.

LiDAR sensors show car sensing traffic around it. LAZR

Source: Shutterstock

Foresight and its subsidiary Eye-Net Mobile offer a number of automotive sensor solutions, including QuadSight and Eye-Net Protect V2X.

This Portfolio Grader “B”-rated stock spent much of 2020 as a penny stock before exploding over the $10 level on Jan. 26. Can it maintain its current valuation, let alone maintain any growth momentum?

Foresight Technology Uses Cameras, Not Lidar or Radar 

Foresight is betting on lidar and radar ultimately falling by the wayside in autonomous vehicle adoption. The company makes the case that these active sensor technologies have glaring issues. Identifying objects by bouncing energy off them — as lidar and radar do — gives low resolution results. Active sensors can detect a potential collision, but they don’t do well at determining what a vehicle is at risk of colliding with.

More importantly, Foresight makes the point that all of these active sensors have the potential to interfere with each other. This may not be an issue when a single autonomous vehicle uses lidar and radar technology on the streets for testing. But if all the cars on the road eventually adopt this technology? Suddenly there are laser beams, ultrasonic pulses and radar beams firing everywhere.

In a blog post, the company suggests that the crosstalk from all the different active sensors might generate false positives or false negatives, resulting in a life-threatening event.

Foresight’s QuadSight autonomous driving sensors are camera-based, passive sensors. They use various cameras, including long-wave infrared for use during nighttime and adverse weather conditions. This provides a higher resolution image for the software to work with. Plus, they do so without emitting energy.

In addition, Foresight’s Eye-Net Mobile subsidiary offers a cellular-based V2X accident-prevention solution. This technology uses Foresight’s QuadSight cameras together with vehicle-to-vehicle cellular communication. Therefore, it provides advanced driver warning of potential collision conditions at upcoming traffic lights and stop signs. 

Why the Big Spike in FRSX Stock?

Why the massive spike in FRSX stock starting last November? Well, that has been the combined effect of several factors. 

Late last year, there were rumors that Foresight might be an acquisition target. That was followed by news that Foresight’s sensor technology was being tested by an unnamed Japanese automaker. This would be the first pilot with a top-tier global auto manufacturer.

At the start of this week, FRSX announced its technology received a patent in China — opening the doors to the massive Chinese auto market. Additionally, the company received a similar patent in the U.S. in 2019.

Bottom Line on FRSX Stock

At this point, self-driving vehicles are an inevitability rather than science fiction. Autonomous vehicles have been in testing for years and have logged millions of miles on the road. Now, we are at the stage where researchers and auto manufacturers are weighing the advantages and disadvantages of various aspects of the technology required to make self-driving cars a reality.

Lidar and radar have been front-runners, and that’s been reflected by interest in lidar stocks. However, if Foresight Autonomous Holdings is right, the future of self-driving cars is in cameras. Recent news of adoption of Foresight’s technology in pilot projects by Japanese automakers has given credence to that possibility. Additionally, it has helped to cause a massive FRSX stock price spike. 

The future looks bright for Foresight, but I’m not convinced it can maintain its high valuation. That growth of nearly 840% over just two months is based on news of trials — not widespread adoption of Foresight technology.

I think this company is a decent bet on autonomous (and semi-autonomous) driving, but FRSX stock at current levels feels overpriced. If I wanted to get onboard with this company, I would wait for a likely FRSX correction. 

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. 

Article printed from InvestorPlace Media,

©2023 InvestorPlace Media, LLC