Aeva Technologies: Coming Orders Will Boost Stock (NYSE:AEVA) – Seeking Alpha

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A lot of the Lidar sensor companies are struggling due to a disconnect with the order books and investor sentiment. Aeva Technologies (NYSE:AEVA) tops the list due to the company not providing an order book total while a lot of big automotive deals are lined up for announcement in the next few months. My investment thesis remains Bullish on the stock boosted by the large cash balance to provide a long investment timeline.
Aeva Tech. reported Q3’22 revenues of only $1.4 million, a dip from $3.5 million last Q3. The company missed analyst targets by $0.6 million and dipped sequentially from the $1.5 million in the prior quarter.
Some of the other Lidar sensor companies have quarterly revenues topping $10 million, but the sector generally doesn’t have a lot of volume production deals ongoing. The investment story still remains for robotic or industrial deals reaching production in 2023 to 2024 with automotive from 2024 to 2026. Either way, the investment story is about the order book and whether the market trusts the figures provided by industry players.
The company shipped the new Aeries II Lidar sensor to over 25 customers in the quarter. The industry has faced supply constraints causing some revenue slippage, though those issues are just about resolved as the calendar flips to 2023.
Aeva Tech. offers promising tech with a focus on 4D Lidar on-chip solutions with FMCW technology. As promising as the technology sounds, the company has limited announced orders compared to the leaders in the automotive sector.
Innoviz Tech. (INVZ) has announced an order book through 2030 at $6.9 billion with plans of topping $9.0 billion soon. Sector leader Luminar Tech. (LAZR) has announced an order book covering the next 5 years with a year-end total of $3.4 billion.
Along with Aeva, these Lidar companies heavily discuss new automotive deals to be announced in the next few months. According to the company on the Q3’22 earnings call, the order book should expand by early next year:
As such, OEMs have been eager to evaluate Aeva’s 4D LiDAR, and our advancement to more RFQs is a testament to the OEM recognition of Aeva’s unique ability to offer high performance and a scalable solution designed for automotive reliability. We expect decisions for some of the programs to be made in the coming months. While we do not anticipate winning every opportunity, we believe we are well positioned to convert additional programs towards production.
Aeva has progressed towards multiple RFQs in the automotive and industrial space along with a deal with PLUS and announced partnerships with Nikon and SICK Ag. The company has a lot of irons in the fire, but the lack of actual production deals with reported orders hurts the stock.

Source: Aeva Tech. Q3’22 presentation
The company has a cash balance of $351 million, generally matching the current market cap of the stock. Aeva doesn’t face the same issues of competitors needing to raise cash or merge to save cash.
In Q3’22, the company burned ~$27 million on an operating loss in the quarter of $32 million. As investors should want, Aeva spent an incredible $26 million during the quarter on R&D with the non-GAAP costs lower due to SBC costs. The Lidar sensor company spends a relatively small amount on SG&A in a good sign management is more focused on the crucial technology and less focused on trying to sell the product.
Aeva has burned ~$83 million from operations for the first 9 months of the year. The company is on a pace to spend $100 million a year with the cash to fund investments far into 2026 or 2027 without relying on sales to cut the cash burn rate.
With Quanergy Systems (OTCPK:QNGY) filing for bankruptcy protection today, the Lidar sensor sector is clearly rife with risk. Aeva Tech. still needs to land major production deals to reach cash flow positive in the next few years. In addition, the sector faces the scenario where automotive OEMs delay the implementation of self-driving technology for several years leading to additional cash burn pressuring the solid cash position of the company.
The key investor takeaway is that Aeva Tech. is attractive at a valuation matching the cash position of the company. The Lidar sensor company will burn a lot of that cash before the business ramps up in the next couple of years, but the opportunity ahead is massive implying a strong risk/reward profile for the stock.
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This article was written by

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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