Microvision Inc (MVIS)

Microvision Inc. (MVIS): A Comprehensive Overview

Company Profile:

History and Background:

Microvision Inc., founded in 1993 and headquartered in Redmond, Washington, is a pioneer in miniature projection display and sensing technology. For years, the company focused on developing PicoP® scanning technology used in projectors and near-eye displays. However, in recent years, Microvision shifted its focus towards the automotive LiDAR market, seeing it as a significant growth opportunity.

Core Business Areas:

Currently, Microvision operates in two primary business areas:

• Microvision LiDAR: This segment develops and manufactures solid-state LiDAR sensors for Advanced Driver-Assistance Systems (ADAS) and Autonomous Vehicles (AVs).
• PicoP® Displays: This segment focuses on licensing the PicoP® display technology for various applications, including consumer electronics, medical devices, and industrial equipment.

Leadership and Structure:

Microvision's leadership team consists of:

• David S. Allen: CEO and Chairman of the Board
• Anirudh D. Panda: Chief Technology Officer
• Sudhir Warrior: Chief Financial Officer
• Amit Bhalla: Chief Operating Officer

The company operates through a Board of Directors and various committees responsible for overseeing strategy, finance, and technology.

Top Products and Market Share:

Products and Offerings:

• Microvision LiDAR: The company offers a range of automotive-grade LiDAR sensors with varying specifications and functionalities.
• PicoP® Displays: Microvision licenses its PicoP® display technology to various partners who integrate it into their products.

Market Share:

• LiDAR: Microvision is a relatively new entrant in the automotive LiDAR market. Still, it faces stiff competition from established players like Velodyne, Luminar, and AEye. It's estimated that Microvision holds a small market share in this rapidly growing segment.
• PicoP® Displays: The market share for PicoP® displays is difficult to quantify, as Microvision licenses the technology to various partners who integrate it into diverse products.

Product Performance and Market Reception:

• LiDAR: Microvision's LiDAR sensors have received positive feedback for their compact size, high resolution, and long range. However, the company is yet to secure significant design wins with major automotive OEMs, limiting its market penetration.
• PicoP® Displays: The technology has been well-received for its small form factor, high brightness, and low power consumption. It's been integrated into various products, including automotive head-up displays and medical imaging devices.

Total Addressable Market:

• LiDAR: The global automotive LiDAR market is expected to reach $3.9 billion by 2027, growing at a CAGR of over 30%. This significant growth potential makes the LiDAR market attractive for Microvision.
• PicoP® Displays: The market for PicoP® displays is also substantial, encompassing various applications in consumer electronics, medical devices, and industrial equipment. The total addressable market for this segment is estimated to be several billion dollars.

Financial Performance:

Recent Financials:

• Revenue: Microvision's revenue has been increasing steadily, reaching $8.9 million in the first half of 2023, compared to $2.3 million in the same period of 2022.
• Net Income: The company remains unprofitable, reporting a net loss of $27.4 million in the first half of 2023.
• Profit Margins: Microvision's gross margins have improved due to increased sales of LiDAR sensors. However, the company still incurs significant operating expenses, resulting in negative net margins.
• EPS: Microvision does not have any earnings per share (EPS) as it is currently unprofitable.

Year-over-Year Comparison:

Compared to the previous year, Microvision's revenue has more than tripled in the first half of 2023. This growth is primarily driven by increased sales of LiDAR sensors. However, the company continues to incur significant losses due to high operating expenses.

Cash Flow and Balance Sheet:

Microvision has a relatively weak cash position, with only $8.2 million in cash and equivalents as of June 30, 2023. The company continues to rely on external financing to fuel its operations.

Dividends and Shareholder Returns:

Dividend History:

Microvision has never paid dividends, as it is currently focused on reinvesting its profits into growth initiatives.

Shareholder Returns:

Microvision's stock price has been volatile in recent years, reflecting the company's growth potential and risks associated with its business model. Over the past year, the stock price has increased by over 100%. However, over a 5-year period, the stock has lost significant value.

Growth Trajectory:

Historical Growth:

Microvision has experienced revenue growth in recent years, driven by increased sales of LiDAR sensors. However, the company remains unprofitable.

Future Growth Projections:

Analysts expect Microvision to continue growing its revenue in the coming years, especially if it secures major design wins with automotive OEMs for its LiDAR sensors. However, profitability remains uncertain, as the company will need to invest heavily in research and development to maintain its competitive edge.

Recent Initiatives:

Microvision is actively engaged in several growth initiatives, including:

• Developing next-generation LiDAR sensors: The company is working on improving the performance and reducing the cost of its LiDAR sensors to gain a competitive edge.
• Expanding partnerships: Microvision has signed partnerships with several automotive companies, including ZF and Continental, to develop and commercialize its LiDAR technology.
• Exploring new markets: The company is exploring opportunities in non-automotive markets for its LiDAR technology, such as robotics and industrial automation.

Market Dynamics:

Industry Overview:

The automotive LiDAR market is rapidly growing, driven by the increasing demand for ADAS and AVs. Technological advancements and cost reductions are fueling the adoption of LiDAR sensors in vehicles.

Competitive Landscape:

Microvision faces stiff competition from established LiDAR players like Velodyne, Luminar, and AEye. These companies have a head start in terms of technology development, partnerships, and market penetration.

Microvision's Positioning:

Microvision differentiates itself by offering compact and high-resolution LiDAR sensors at a competitive price point. The company believes its technology is well-suited for mass adoption in the automotive industry.

Competitors:

• Velodyne (VLDR)
• Luminar (LAZR)
• AEye (LIDR)
• Innoviz Technologies (INVZ)
• Quanergy (QNGY)

Potential Challenges and Opportunities:

Challenges:

• Competition: Microvision faces intense competition from established LiDAR players with greater resources and market presence.
• Technology development: The LiDAR market is evolving rapidly, and Microvision needs to continuously innovate to stay ahead of the curve.
• Profitability: The company remains unprofitable, and achieving profitability will require significant operational improvements and scaling up production.

Opportunities:

• Growing LiDAR market: The automotive LiDAR market is expected to experience significant growth in the coming years, creating substantial opportunities for Microvision.
• Partnerships: Strategic partnerships with automotive OEMs and Tier 1 suppliers can accelerate Microvision's market penetration and commercialization efforts.
• Non-automotive markets: Exploring opportunities in non-automotive markets, such as robotics and industrial automation, can diversify Microvision's revenue streams.

Recent Acquisitions:

Microvision has not made any acquisitions in the last three years.

AI-Based Fundamental Rating:

Rating: 6/10

Justification:

Microvision has strong growth potential due to the promising LiDAR market. The company's technology is well-regarded, and it has established partnerships with major automotive companies. However, it faces stiff competition, remains unprofitable, and has a weak cash position. Investors should carefully consider the risks and rewards before investing in Microvision.

Sources and Disclaimers:

Sources:

• Microvision Inc. Investor Relations website: https://microvision.com/investors/
• Yahoo Finance: https://finance.yahoo.com/quote/MVIS/
• Seeking Alpha: https://seekingalpha.com/symbol/MVIS

Disclaimer:

This information is solely for educational purposes and should not be considered investment advice. It is essential to conduct thorough research and consult with a qualified financial professional before making any investment decisions.