Intrinsic Value MicroVision, Inc. (0K17.L)

• Previous Close: £0.83
• Intrinsic Value: £0.45
• Upside potential: -46%

Stock Valuation Context

Business Model And Market Position

MicroVision, Inc. operates in the competitive lidar and augmented reality (AR) technology sector, specializing in advanced laser beam scanning solutions. The company’s core revenue model revolves around selling its proprietary MEMS-based lidar sensors and micro-display modules to automotive OEMs and ODMs, targeting applications in autonomous driving, smart home systems, and AR headsets. Its PicoP scanning technology and 1440i MEMS module differentiate it in high-growth markets, though adoption remains in early stages. MicroVision competes against larger, well-capitalized players in lidar, such as Luminar and Innoviz, while its AR display technology faces competition from tech giants like Microsoft and Magic Leap. The company’s niche expertise in MEMS and opto-mechanical systems provides a technological edge, but scaling commercialization remains a challenge due to capital intensity and lengthy sales cycles in automotive and AR sectors. MicroVision’s strategic focus on long-range lidar and AR-compatible modules positions it in high-potential verticals, but its market share is currently limited by its smaller scale and reliance on design wins.

Revenue Profitability And Efficiency

MicroVision reported modest revenue of $4.7 million in FY 2023, reflecting its early-stage commercialization efforts, while net losses widened to -$96.9 million due to high R&D and operational costs. Operating cash flow was -$68.5 million, underscoring significant cash burn as the company invests in product development and market penetration. Capital expenditures were minimal at -$374k, suggesting asset-light operations but limited production scalability.

Earnings Power And Capital Efficiency

The company’s diluted EPS of -$0.46 highlights its unprofitability, driven by negative operating leverage and high fixed costs. With no dividend payouts, MicroVision reinvests all capital into growth initiatives, though its return on invested capital remains deeply negative due to low revenue scale relative to expenses.

Balance Sheet And Financial Health

MicroVision holds $54.5 million in cash against $51.6 million in total debt, indicating a thin liquidity buffer. The balance sheet suggests reliance on external funding to sustain operations, given persistent cash burn. Absence of significant tangible assets further limits financial flexibility.

Growth Trends And Dividend Policy

Revenue growth is nascent, hinging on lidar adoption in automotive and AR markets. The company has no dividend policy, prioritizing R&D and partnerships to drive future top-line expansion. Investor returns depend entirely on speculative technology adoption and potential buyouts.

Valuation And Market Expectations

With a market cap of ~$270 million and high beta (2.03), MicroVision is priced as a high-risk, high-reward play on lidar and AR disruption. Negative earnings and cash flows imply valuation is driven by long-term optionality rather than near-term fundamentals.

Strategic Advantages And Outlook

MicroVision’s MEMS-based IP and focus on compact, high-performance lidar could prove disruptive if automotive or AR demand accelerates. However, execution risks, competition, and funding needs cloud the outlook. Success hinges on securing design wins and scaling production efficiently.

Sources

Company filings, Bloomberg