Mobileye Shares Plunge on Dismal Revenue Forecast and Inventory Woes

Mobileye Global Inc. has issued a revenue warning that sent its shares tumbling, with the company anticipating a significant decline in first-quarter revenue. The decrease is estimated at about 50% from the $458 million reported the previous year, which is starkly below the expected $557 million. This shortfall is attributed to an excess inventory issue, as the company's customers are holding an estimated 6 million to 7 million units of its EyeQ product. The stock price of Mobileye dropped by more than 25% in premarket trading following the announcement.

The company also provided a full-year revenue forecast that is below analyst expectations. For the fiscal year 2024, Mobileye projects revenue to be between $1.83 billion and $1.96 billion, compared to the $2.56 billion anticipated by analysts. Despite the first-quarter challenges, Mobileye expects that the situation will normalize over the remainder of the year as customers work through the excess inventory, and by the end of 2024, inventory levels are projected to return to normal. The ripple effect of the announcement was felt across the semiconductor industry, impacting the stock values of other companies in the chip sector.