Innoviz Technologies Ltd (INVZ)

[WeTheMarket]

Cathie Wood Pulls the Trigger on These 3 “Strong Buy” Stocks
TipRanks
Fri, November 19, 2021
Link to full article

The billionaire investors stand in a league of their own. It’s not necessarily their wealth that puts them there – rather, it’s their success in the markets, in establishing themselves at the highest level of the financial world, that built their wealth. Cathie Wood, the founder and CEO of $75 billion asset manager Ark Invest, is one of Wall Street’s most influential investors due to her stock-picking power and her company's impressive returns.

Looking at the current market situation, Wood believes that "as long as we don’t fall into recession," stocks are poised for "a long bull market." It’s an interesting forecast, given that we’re currently at the top of such a long bullish trend; the S&P 500, at 4,700, stands at near all-time high. But when top investors, especially investors with Wood’s long-term level of success, talk, the market listens.

Looking to Wood for investing inspiration, we used TipRanks’ database to find out if three stocks the investing guru recently added to her fund represent compelling plays. According to the platform, the analyst community believes they do, with all of the picks earning “Strong Buy” consensus ratings. Let’s jump right in.

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Innoviz Technologies (INVZ)

Last up is Innoviz, another tech stock – but this one has a much more hands-on approach. Innoviz is a producer of LiDAR systems for the automotive market. These advanced sensor systems (LiDAR stands for ‘light detection and ranging’) were originally developed for cartographic applications, allowing aircraft and satellites to create highly accurate topographic maps – but they have been adapted by automobile manufacturers as the ‘eyes’ of the cars, and are now a vital technology in the autonomous vehicle niche.

Innoviz’ products, InnovizOne and InnovizTwo, are solid-state LiDAR sensors specifically designed for automotive applications. They are rugged, light-weight, and are compatible with Level 3-5 autonomous vehicles. InnovizOne is on the market now, and InnovizTwo is scheduled for launch before year’s end. The products have market applications in a range of niches, from trucking to robotaxis to consumer vehicles, and even in industrial drones, sidewalk delivery tech, and heavy machinery.

The company reported its 3Q21 earnings on November 10, and since then the stock has started reversing its year-long decline. The quarterly report showed continued progress on key automotive programs. Importantly, InnovizTwo, which boasts higher performance than the InnovizOne, can now be provided directly to customers with Innoviz as a Tier 1 supplier. Engineering samples of InnovizTwo will be available before the end of this year. On the financial end, the company reported $2.1 million in total revenues, a modest sum that reflects the company’s ‘ramping up’ status – but the top line was up 106% from the year-ago quarter.

As for Cathie Wood, she was impressed enough by Innoviz to buy up 352,816 shares in the company in Q3. This stake has a current value of $2.36 million.

Wood isn’t the only INVZ fan. Covering the stock for investment banking firm Cantor, analyst Andres Sheppard takes up coverage of this stock with a bullish attitude.

“Management noted in Q3 call that they are in late stages negotiations with another large automobile manufacturer and competing only with one other supplier. We think landing this opportunity would result in significant upside," Sheppard opined.

"While management appears more focused on applying their LIDAR solutions primarily to passenger vehicles, we believe the technology could also complement other applications such as radar, traffic lights, cameras, agriculture, etc. Overall, the total market opportunity continues to be quite large (Cantor previously calculated a $4B TAM…) and we continue to believe this is conservative,” the analyst added.

To this end, Sheppard puts a $9 price target here, implying a 12-month upside of 33%, along with an Overweight (i.e. Buy) rating. (To watch Sheppard’s track record, click here)

All in all, Innoviz has a unanimous Strong Buy consensus rating based on 3 positive analyst reviews. The shares are priced at $6.8 and the $10.33 average price target suggests ~52% upside from that level.