Aurora Innovation (AUR) is back in focus after launching fully driverless long haul truck operations in Texas with McLane and adding a new Dallas to Oklahoma City freight route through Volvo Autonomous Solutions.
See our latest analysis for Aurora Innovation.
These route launches come after first quarter results that included sales of US$1 million and a net loss of US$223 million. They arrive alongside a 30 day share price return of 46.3% and a 3 year total shareholder return of about 4x, suggesting momentum has recently picked up despite ongoing losses.
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With the stock up 99.2% year to date and trading at a discount to some analyst and intrinsic estimates, the key question is whether Aurora is still mispriced or if the market already reflects its future growth.
Most Popular Narrative: 21.2% Undervalued
At a last close of $7.71 versus a narrative fair value of $9.79, the current price sits below what the most followed model suggests is reasonable.
Planned deployment of second and third generation hardware, including a more durable kit designed for 1 million miles and roughly 50 percent lower unit cost, may reduce cost of revenue and support a path to positive gross margins and improving net margins as volumes scale.
Want to see what sits behind that margin story? The narrative leans heavily on rapid revenue expansion, rising profitability and a rich future earnings multiple. The full breakdown joins those pieces into one valuation picture.
Result: Fair Value of $9.79 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still need to weigh the very small current revenue base against the large quarterly loss and the potential equity dilution if profitability arrives later than expected.
Find out about the key risks to this Aurora Innovation narrative.
Next Steps
With mixed sentiment running through this story, it makes sense to check the numbers yourself and decide where you stand on the balance of risks and rewards. You can start with 2 key rewards and 2 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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