MicroVision (NASDAQ:MVIS) wants to be known as an established tech company. It has a 25-year record as a publicly traded stock and it’s the pioneer of advanced laser scanning technology. That’s all reality. Unfortunately, the other reality is that most investors know MVIS stock as Reddit-powered “meme” stock.
A penny stock in early 2020, it suddenly gained steam last November and rocketed to a $23.72 close in February. After a two-month pullback, MVIS stock soared to a $26.44 close on April 26. And then the bottom fell out.
Over the course of the last week, MVIS dropped 42%.
The carnage has continued in after hours trading. That leaves potential investors with a puzzle. Is MicroVision developing technology that’s going to be in demand? How entangled is the price of MVIS stock in the ongoing Reddit meme stock situation? Above all, with MVIS suffering such a big drop, is this an opportunity to pick up MicroVision shares?
MVIS Stock: What Happened Last Week?
The trouble for MicroVision shareholders began last Tuesday. MVIS stock had closed the day before at $26.44, its highest level in a decade. That represented 12-month growth of nearly 2,500%. At that point, a selloff began — likely a case of profit-taking. Reuters reported trading volume more than three times MicroVision’s 10-day moving average. MVIS was the most mentioned stock on Reddit’s WallStreetBets forum for the day.
It ended up shedding 24% of its value in a single session.
The carnage escalated on Thursday, when MicroVision reported its first quarter earnings. Revenue was $479,000 compared to $1.5 million a year ago. The company lost $6.2 million for the quarter, or 4 cents per share. That compares to a loss of $4.9 million — also 4 cents per share — in Q1 2020. The company has issued more shares since 2020, which is why the loss per share remains the same, even though the amount of the loss is much higher.
Analysts were expecting $600,000 in sales and a 2 cents per share loss. The miss resulted in yet another blow for MVIS stock. That impact is still being felt.
Cause for Optimism for MicroVision
MicroVision’s primary current product is its PicoP miniature scanning technology. It’s used in devices like video projectors. With revenue under $500,000 in the last quarter, this obviously isn’t a high volume business.
However, MicroVision has been working on adapting its expertise in scanning technology to develop LiDAR sensors. LiDAR is being widely adopted for a range of purposes including mapping, photography and for use in automotive safety and autonomous driving systems. The global LiDAR market was worth $700 million in 2019, but it’s projected to grow rapidly to $2.9 billion by 2027.
MicroVision says it is on track to begin delivery of its new automotive LiDAR sensors in the third or fourth quarter. Capturing a chunk of this high-profile, and high-growth market would significantly boost MicroVision’s revenue. That would also offer long-term growth potential for MVIS stock.
Bottom Line on MicroVision
There is doubt that retail investors and the Reddit effect are muddying the waters around MicroVision. They have been a driving force behind some of this stock’s big surges over the past 12 months. However, there is a danger in writing off a company like MicroVision as being nothing more than a Reddit-powered meme stock. When companies get slapped with that label, serious investors tend to be dismissive.
However, MicroVision isn’t so easily dismissed. LiDAR is a rapidly growing market and demand is going to grow those revenues. In addition, this Portfolio Grader “B-rated” stock currently has $75.3 million in cash and cash equivalents — compared to $16.9 million at the end of Q4. That’s plenty to see it through to the production stage.
The bottom line? I’m not sure I’d be jumping onboard the MVIS stock bandwagon this instant. It looks as though it may have farther to fall yet. But I’ll be watching it very closely as the drop may just have opened a door. With the global demand for LiDAR surging, the prospects for MicroVision (and long-term growth potential for MVIS stock) are very real.
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.
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