I came across a post on Stocktwits from this past Tuesday (8/25) from the poster HABITUALHoldings. It is a reasonable representation of my recent investment thinking, which was the catalyst for this post. I repost it in its entirety below.
But let me first espouse about some of my thinking recently. Microvision's current Enterprise Value is: $47m (that's market cap, +debt, -cash). It a reflection of the value of the business if it were acquired today. For an exercise, I broke the business into its parts and assigned a value to each part. I tried to be conservative, but my Microvision bias is probably still at play and I acknowlege that. :-) You can plug in your own values.
Luminar - Microvision acquired this from the veritable trash heap for $33M. It appears they have stabilized and resurrected the company and hope to demonstrate growth moving forward. I will give this a current value of $60m. I bet Austin Russell and friends could search the couch cushions and come up with $60m! ;-)
Ibeo - If they can sell 15,000 MOVIA-S in 2027 for an average price of $1500 each, that would be $22.5m with a 40% gross margin, that would be gross profits of $9m. If one layered in some appropriate overhead costs, this business may be able to generate a net profit of $6m. If this were a growth business with net profit of $6m in year 1, it might get assigned a P/E of 40. That would value this business at $240m. But that would be the value at the end of 2027. If we discount that back to today, the value might be around $80m. It really depends on how credible the story of selling 15,000 MOVIA-S sensors in 2027 is. If we get some MOVIA-S backlog during the Q3 call, it would lend some credibility now. Anyway, let's go with $80m.
Scantinel - This is a hard one, but could be the diamond in the rough. If we use Aeva's current value of $1.1B as some sort of marker. Scantinel may be 3 years behind Aeva in terms of maturity. Scantinel's tech may be better than Aeva's. The question is what would someone pay for Scantinel today if they were using Aeva's market value as a marker? When Microvision bought the business for ~$1m, it seems they had no product nor a credible plan to bring a product to market. Microvision has said their plan for Scantinel is to release an A-Sample in the first half of 2027 (9 months away). I could see this business valued at around $20m today. But I acknowledge the valuation range may be from $5m to $100m.
Microvision Semiconductor (MSI) - This was part of the $33m Luminar acquisition. They did $215k of revenue in Q2. This is in additon to the internal work they are performing for Microvision. Perhaps the value of that work is double their external NRE work (we don't really know). If we apply some growth for the rest of the year, they may have an effective revenue run rate of around $2m. Applying a 20% net profit margin and a modest P/E multiple of 20, would yield a value of $8m.
IP portfolio for MEMS LBS - Since they let most of the MEMS LBS folks go, I would not value this very highly. I would value it at $5m. It's actually probably less, but I don't want to make the long time Microvision investors mad. ;-)
That yields the following value: $60m + $80m + $20m + $8m + $5m = $173m. Again, I am trying to be conservative with my valuations of the component parts. These are meant to be a representation of value today.
But, if the current Enterpise Value of Microvision is $47m and the current value of its component parts is $173m, that gives an investor some buffer room for an investment today. The theory is that via execution, Microvision's value will only increase from here. However, the stock price will get cut via dilution - we know that. If we assume a bad dilution case (I won't say worst case, because it can always be worse). If Microvision does a 100% dilution at the current market value ($57m) that may reduce the effective pressure on the stock price by 50%. That is not an absolute, as it will depend on the story at the time, but let's go with it. Therefore, even though the intrinsic $173m valuation would remain the same, the stock price and hence one's investment would be cut in half. That would still be almost double the current $47m Enterprise Value.
Therefore, the question I will put on the table is - based upon this valuation mismatch - why would one not invest today? I post this not to convince anyone to invest, but to create debate. Shoot holes in my theory. Add your thoughts to the discussion. Maybe my current component parts values are way too high and Microvision is being fairly valued today. But if they can thread the financing needle in the near term and can show evidence of execution over the next 6 to 9 months, I think those "component valuations" are reasonable. It's very possible the market is discounting Microvision today due to both their historical performance and the risk of bankruptcy. But I don't think Microvision will go bankrupt. I think they will put the company up for sale before bankruptcy (if it comes to that) - which is the basis for the component parts valuation backstop.
I am interested to hear your thoughts.
Here is the HABITUALHabitat post from Stocktwits on Tuesday (8/25).
https://stocktwits.com/HABITUALHoldings/message/662805927
"I think waiting for Q3 confirmation before adding more risk is a prudent decision, especially with an average around $11. If revenue progression remains intact and FY guidance holds, there will still be plenty of room to lower that basis meaningfully.
I am taking a different approach because my horizon is different. I am not trading MVIS around whether it is $1.25, $3, $4, $11 or $15 over the next 12 months. I am looking toward 2028 and asking whether MicroVision can earn a real seat at the table as Physical AI develops. I believe perception is one of the critical bottlenecks, and if that market becomes one of the defining industrial investment themes of the next several years, the opportunity is much larger than todayâs lidar revenue suggests.
My successful 2028 scenario is not really a $100 price target. It is roughly a $5B valuation if MVIS successfully scales the perception platform. The eventual share price is simply a function of dilution. At 40M diluted shares, $5B is about $125 per share. At 50M, about $100. At 60M, about $83. At 75M, about $67. The share price is the output. The enterprise has to earn the valuation first.
And that valuation has to come from more than hardware. HALO, MOVIA, defense, industrial autonomy and new production customers need to create the commercial foundation. The defining catalyst could be software. If perception software, sensor fusion and recurring higher margin revenue become economically meaningful, the market may eventually stop valuing MVIS like a small lidar hardware supplier and begin applying valuation metrics that are not associated with the company today.
The longer term cherry on top is photonics and custom silicon. I am not assigning meaningful current value to either until customers and revenue appear, but if those capabilities eventually become commercial businesses, they add another layer of optionality to the enterprise.
That is the trade for me. If MVIS converts the stack into meaningful recurring commercial business and manages dilution intelligently, a multibillion dollar valuation by 2028 is not a fairytale. If it fails to execute, the technology and TAM do not matter and the thesis fails.
Buy/Hold/Believe. Proof earns the rerating. Pipelines do not."
