VNE

Veoneer Inc

Industrial/Transportation, Consumer


Presented:01/22/2020
Price:$13.50
Cap:$1.50B
Current Price:$36.95
Cap:$4.12B

Presented

Date01/22/2020
Price$13.50
Market Cap$1.50B
Ent Value$1.02B
P/E RatioN/A
Book Value$16.32
Div Yield0%
Shares O/S111.40M
Ave Daily Vol470,416
Short Int7.87%

Current

Price$36.95
Market Cap$4.12B
Veoneer, Inc. engages in the design, development, sale, and manufacture of automotive safety electronics. It operates through the Electronics and Brake Systems segments. The Electronics segment consists of safety and restraint control systems product areas. The Brake Systems segment comprises of brake systems product area. Its products include advanced driver assistance systems and highly automated driving solutions with focus on autonomous driving. The company was founded on April 1, 2018 and is headquartered in Stockholm, Sweden.

Publicly traded companies mentioned herein: Aptiv PLC (APTV), Autoliv Inc (ALV), Bosch Ltd (INR), Bayerische Motoren Werke Aktiengesellschaft AG (BMW GR), Continental AG (CON GR), Intel Corporation (INTC), Veoneer Inc (VNE)

Highlights

The presenter is short Veoneer (VNE), a 1.5B market cap, 2018 spinoff from Autoliv's electronics and automated driving division. VNE designs, develops, manufactures, and sells automotive safety electronic products; a bull case has been supported in part by their focus on ADAS technologies, a high margin growth segment. In the presenter’s opinion, however, the reality is that VNE is a small, subscale player in a crowded industry that is underperforming relative to its peers, trading at an all time low of $13 per share. The company is experiencing cash burn ~$500M a year, a trend which the presenter estimates will continue for the next 2 years. As a result, he assumes the stock will be worth substantially less over the ensuing years. 

VNE’s business is focused on radar, vision systems, and software for the autonomous driving market. It operates in two segments: Electronics (ADAS) and Brake/Restraint Systems. The presenter is bearish on VNE as he notes that it's not just the brake and restraint control business that’s down, but the high growth advanced driver-assistance systems (ADAS) business as well.

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