Guaslackjack
2021-12-18
Now that’s some good intel 😉
Intel: Mobileye IPO Could Be A Masterstroke
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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":699649010,"tweetId":"699649010","gmtCreate":1639796322812,"gmtModify":1639796380788,"author":{"id":3586577983191661,"idStr":"3586577983191661","authorId":3586577983191661,"authorIdStr":"3586577983191661","name":"Guaslackjack","avatar":"https://static.tigerbbs.com/24e4124cffdea60f8b2aa5b3ba1651b3","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":8,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>Now that’s some good intel 😉</p></body></html>","htmlText":"<html><head></head><body><p>Now that’s some good intel 😉</p></body></html>","text":"Now that’s some good intel 😉","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/699649010","repostId":1169026598,"repostType":4,"repost":{"id":"1169026598","kind":"news","pubTimestamp":1639698567,"share":"https://www.laohu8.com/m/news/1169026598?lang=&edition=full","pubTime":"2021-12-17 07:49","market":"us","language":"en","title":"Intel: Mobileye IPO Could Be A Masterstroke","url":"https://stock-news.laohu8.com/highlight/detail?id=1169026598","media":"seekingalpha","summary":"Summary\n\nIntel is spinning off Mobileye via an IPO in mid 2022 to raise capital for its ambitious gr","content":"<p><b>Summary</b></p>\n<ul>\n <li>Intel is spinning off Mobileye via an IPO in mid 2022 to raise capital for its ambitious growth plans. In this note, we will discuss the logic of this transaction.</li>\n <li>Mobileye is one of the leading players in autonomous vehicle technology, which means it should command a much higher multiple than Intel.</li>\n <li>At ~9x Price-to-FCF, Intel is massively undervalued, and as such Mobileye's valuation is suppressed. The IPO is likely to act as a significant value unlocking event for Intel.</li>\n <li>According to my analysis, Mobileye could quite easily fetch a valuation of $50-100B in the current market environment. Hence, Intel could raise a significant sum by selling just a minor stake.</li>\n <li>Even after the IPO, Intel will continue to control Mobileye with a majority stake, and Intel's CEO, Pat Gelsinger, will be shaping Mobileye's future as the Chairman of its Board. Hence, Intel is getting the best of both worlds with this deal. I rate Intel a strong buy at $50.</li>\n <li>Looking for a portfolio of ideas like this one? Members of Beating the Market get exclusive access to our model portfolio.</li>\n</ul>\n<p><b>Introduction</b></p>\n<p>Despite the astounding rally in chip stocks over the last 18-24 months, Intel's (NASDAQ:INTC) valuation (~12x P/FCF) continues to remain depressed. The semiconductor supply shortage is showing no signs of abating, with Intel selling all that it could make. In 2021, Intel is set to generate record revenues and operating cash flows. Although Intel is facing margin pressures due to heightened competition, its business fundamentals remain strong. Intel's balance sheet and free cash flow generation are robust. An inflationary environment is supposed to be supportive of cash flow machines like Intel. Hence, the weak price action in Intel is puzzling (even after considering Intel's manufacturing woes over the last few years).</p>\n<p>In today's note, we will focus our discussion on Intel's upcoming spinoff Mobileye, which is likely to act as a value unlocking catalyst for this chip giant.</p>\n<p>Let's begin our analysis by deciphering the logic behind an IPO for Mobileye.</p>\n<p><b>Understanding The Motivation Behind Intel's Mobileye Spinoff</b></p>\n<p>Soon after rejoining Intel as CEO, Pat Gelsinger outlined an aggressive hybrid-sourcing and foundry plan to take the semiconductor giant back to its past glory (after some woeful execution from previous management). On paper, Pat's strategy is very simple. Intel will outsource next-gen chip manufacturing to foundries like TSMC (NYSE:TSM), which would enable them to compete against rivals like AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA). While Intel is working toward fixing its manufacturing woes and regaining the technological lead at the node level, the company also is opening up its manufacturing plants in the Western Hemisphere for other companies (i.e., entering the foundry business).</p>\n<p></p>\n<p>The semiconductor industry is undergoing a painful supply crisis that has had far-reaching impacts across multiple industries. With the EV revolution, the demand for automotive chips is set to explode higher. Hence, the chip shortage could last for years and years. Only a handful of companies can solve this crisis, and Intel is probably the only company that could help abate this semiconductor shortage in the Western Hemisphere.</p>\n<p>Pat Gelsinger has put forward an aggressive growth plan for Intel, which could see the company growing at ~10-12% CAGR from 2023-2027. However, Pat's plan is highly capital intensive, and so Intel needs more capital.</p>\n<p><img src=\"https://static.tigerbbs.com/469130405b455b41aba450a41af1ccd1\" tg-width=\"1122\" tg-height=\"551\" referrerpolicy=\"no-referrer\"></p>\n<p>Intel is set to enter a heavy capex-spending cycle with plans to increase capex for 2022 to ~$25B-$28B. With Intel's stock trading close to record low valuation (by P/FCF) from the past 10 years, raising capital through fresh equity issuance would be highly dilutionary for Intel's shareholders. Intel is one of the most-hated stocks on Wall Street, and the management certainly is not interested in alienating more of its investor base. Hence, a capital raise through equity is ruled out.</p>\n<p>Another way to raise capital would be through debt issuance, and Intel's balance sheet and free cash flow generation are strong enough to allow for more debt. However, Intel's margins are set to come under pressure due to a potential price war with the likes of AMD, and with increased CAPEX-spending, Intel's free cash flows may suffer too in the near term. Hence, Intel's management could be unwilling to raise more capital via debt (which already stands at ~$40B).</p>\n<p>Asset monetization was probably the only viable alternative for raising capital to fund Intel's growth plan. And if we look at Intel's business, Mobileye is probably the most under-appreciated asset buried under a steep conglomerate discount. Mobileye is a category-leading business in autonomous driving (one of the hottest spaces in the market), and it would undoubtedly command a much higher trading multiple in the current market environment than what Intel paid for it back in 2017. Hence, the Mobileye spinoff is a very sound and logical decision from Intel's management.</p>\n<p><b>Pat Says Mobileye Is Comparable To Tesla! Is It Though?</b></p>\n<p>In 2017, Intel acquired Mobileye for an eye-watering sum of ~$15.3B. Since this acquisition, Mobileye has delivered significant revenue growth, achieved numerous technical innovations, and invested capital toward solving the most critical problems in the scaled deployment of autonomous driving technology. Unlike most IPOs, Mobileye is already a highly-profitable company. Hence, Intel could get a big return on its investment by selling a minority stake in Mobileye.</p>\n<p>In the last 12 months, Mobileye has generated revenues of $1.36B, with operating profits coming in at $471M (operating margin of ~35%). Also, Mobileye achieved the milestone of delivering its 100 millionth EyeQ SOC, unveiled its production robotaxi (network coming live in 2022) and won 41 new ADAS and full self-driving programs with 30 legacy automakers. In a nutshell, Mobileye has taken tremendous strides both from a technical and financial standpoint.</p>\n<p>Since Mobileye has always operated as an independent subsidiary within Intel, the separation won't be hard. The strategic partnership with Intel will remain in place, and higher visibility should enable Mobileye to win more partners across the globe. With its robotaxi network set to go live in 2022, Mobileye is probably going to be the first to market in L3/L4 AV technology.</p>\n<p>Mobileye is truly at an inflection point, and its future looks as bright as ever. Some critics would say that Intel is selling its future to chase the past. However, we must acknowledge the realities around us. The hype around autonomous driving and EVs has never been higher, and Mobileye's spectacular growth story is buried under Intel's umbrella. By bringing Mobileye to the public markets as a standalone entity, Intel is likely to receive a cash boost (at a rich trading multiple), whilst it will also maintain its majority stake (control) in the company.</p>\n<p>Although Pat compared Mobileye to Tesla (NASDAQ:TSLA) due to its AV technology (and future Robotaxi business), I think it's more comparable to Nvidia. For the purpose of this note, we shall create a guesstimate for Mobileye's valuation using trading multiples for both Tesla and Nvidia. Due to its relatively small size, I would expect Mobileye to command a higher multiple than these companies.</p>\n<p>Looking through the lens of relative valuation, Mobileye's IPO could be valued anywhere in the range of ~$50B to $70B. However, let us also determine Mobileye's absolute valuation using its financials.</p>\n<p><b>Estimating Mobileye's Fair Value</b></p>\n<p>To determine Mobileye's fair value, we will employ our proprietary valuation model. Here's what it entails:</p>\n<ul>\n <li>In step 1, we use a traditional DCF model with free cash flow discounted by our (shareholders) cost of capital.</li>\n <li></li>\n <li>In step 2, the model accounts for the effects of the change in shares outstanding (buybacks/dilutions).</li>\n <li></li>\n <li>In step 3, we normalize valuation for future growth prospects at the end of the ten years. Then, we arrive at a CAGR using today's share price and the projected share price at the end of 10 years. If this beats the market by enough of a margin, we invest. If not, we wait for a better entry point.</li>\n <li></li>\n <li>In step 4, the model accounts for dividends.</li>\n</ul>\n<p><b>Assumptions:</b></p>\n<p>Mobileye is a rapidly-growing, highly-profitable business. With a massive TAM and leading ADAS & Autonomous Vehicle [AV] technology, Mobileye is set to ride an enormous secular growth trend as the shift to autonomous-driving EVs accelerates over the 2020s. Hence, a 10-year CAGR growth rate of 25% could be highly conservative. As the MoovitAV robotaxi network grows, Mobileye's margins are likely to head higher. Therefore, Mobileye's FCF margin could quite comfortably hover at more than 30% when the business matures, and growth slows down (not going to happen for another decade or two).</p>\n<p>As you can see, Mobileye is worth ~$15 per share or ~$60B market cap. The assumptions utilized in this valuation exercise are conservative, which means Mobileye could be worth even more than $60B.</p>\n<p>If Mobileye's 10-year CAGR revenue growth rate were to be in the 30%-50% range (instead of our estimate of 25%), Mobileye's fair value would come out to be ~$88B to ~$340B. At a $1T valuation, Tesla's implied 10-year CAGR revenue growth rate is ~50%. Since Mobileye is growing from a much smaller base, and considering the fact that it could become the industry standard for AV technology (by leveraging existing relationships with legacy automakers like Ford, BMW, and many others), I would imagine Mobileye has a better chance of delivering such hyper-growth than Tesla.</p>\n<p>Even after the spinoff of Mobileye, Intel would generate revenues of ~$73B in 2022 with virtually zero impact on its cash flow generation. Although Intel will lose one of its key assets in this transaction (not really, as Intel will still control Mobileye through a majority stake), the proceeds will help Intel's management execute its ambitious growth plans. Using conservative estimates, Intel (minus Mobileye) is still worth ~$70 per share (~$280B market cap) (this valuation exercise is available in my previous articles on Intel). Therefore, the Mobileye spinoff is very likely to unlock hidden value for Intel's shareholders.</p>\n<p><b>Concluding Thoughts</b></p>\n<p>With Intel's market cap hovering at just about $200B, raising capital through stock issuance is not viable. Although Intel's balance sheet and free cash flow generation remain robust, the company is entering a heavy capex-spending cycle, which makes an additional debt raise troublesome. Mobileye is one of the faster-growing business lines at Intel. However, selling a small piece of it could yield a massive sum for Intel, which could be utilized toward Pat Gelsinger's ambitious growth plan for the company. According to my analysis, Mobileye could fetch a valuation of $50B-$100B in the current market environment, and I think Intel will end up raising ~$10B-$15B from the Mobileye IPO while retaining control of the company. I like this move from Intel's management as I can see significant value unlocking from this spinoff.</p>\n<p>Intel is a deeply undervalued cash cow that pays out a healthy, growing dividend. With the Mobileye IPO set to unlock some of Intel's hidden value, I expect to see big capital appreciation in Intel over the next 12-24 months. Therefore, I continue to rate Intel a strong buy at $50.</p>\n<p>Key Takeaway: I rate Intel a strong buy at $50.</p>\n<p>Thanks for reading, and happy investing. Please share your thoughts, concerns, and/or questions in the comments section below.</p>","source":"lsy1638401102509","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Intel: Mobileye IPO Could Be A Masterstroke</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIntel: Mobileye IPO Could Be A Masterstroke\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-12-17 07:49 GMT+8 <a href=https://seekingalpha.com/article/4474906-intel-mobileye-ipo-masterstroke><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nIntel is spinning off Mobileye via an IPO in mid 2022 to raise capital for its ambitious growth plans. In this note, we will discuss the logic of this transaction.\nMobileye is one of the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4474906-intel-mobileye-ipo-masterstroke\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"INTC":"英特尔"},"source_url":"https://seekingalpha.com/article/4474906-intel-mobileye-ipo-masterstroke","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1169026598","content_text":"Summary\n\nIntel is spinning off Mobileye via an IPO in mid 2022 to raise capital for its ambitious growth plans. In this note, we will discuss the logic of this transaction.\nMobileye is one of the leading players in autonomous vehicle technology, which means it should command a much higher multiple than Intel.\nAt ~9x Price-to-FCF, Intel is massively undervalued, and as such Mobileye's valuation is suppressed. The IPO is likely to act as a significant value unlocking event for Intel.\nAccording to my analysis, Mobileye could quite easily fetch a valuation of $50-100B in the current market environment. Hence, Intel could raise a significant sum by selling just a minor stake.\nEven after the IPO, Intel will continue to control Mobileye with a majority stake, and Intel's CEO, Pat Gelsinger, will be shaping Mobileye's future as the Chairman of its Board. Hence, Intel is getting the best of both worlds with this deal. I rate Intel a strong buy at $50.\nLooking for a portfolio of ideas like this one? Members of Beating the Market get exclusive access to our model portfolio.\n\nIntroduction\nDespite the astounding rally in chip stocks over the last 18-24 months, Intel's (NASDAQ:INTC) valuation (~12x P/FCF) continues to remain depressed. The semiconductor supply shortage is showing no signs of abating, with Intel selling all that it could make. In 2021, Intel is set to generate record revenues and operating cash flows. Although Intel is facing margin pressures due to heightened competition, its business fundamentals remain strong. Intel's balance sheet and free cash flow generation are robust. An inflationary environment is supposed to be supportive of cash flow machines like Intel. Hence, the weak price action in Intel is puzzling (even after considering Intel's manufacturing woes over the last few years).\nIn today's note, we will focus our discussion on Intel's upcoming spinoff Mobileye, which is likely to act as a value unlocking catalyst for this chip giant.\nLet's begin our analysis by deciphering the logic behind an IPO for Mobileye.\nUnderstanding The Motivation Behind Intel's Mobileye Spinoff\nSoon after rejoining Intel as CEO, Pat Gelsinger outlined an aggressive hybrid-sourcing and foundry plan to take the semiconductor giant back to its past glory (after some woeful execution from previous management). On paper, Pat's strategy is very simple. Intel will outsource next-gen chip manufacturing to foundries like TSMC (NYSE:TSM), which would enable them to compete against rivals like AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA). While Intel is working toward fixing its manufacturing woes and regaining the technological lead at the node level, the company also is opening up its manufacturing plants in the Western Hemisphere for other companies (i.e., entering the foundry business).\n\nThe semiconductor industry is undergoing a painful supply crisis that has had far-reaching impacts across multiple industries. With the EV revolution, the demand for automotive chips is set to explode higher. Hence, the chip shortage could last for years and years. Only a handful of companies can solve this crisis, and Intel is probably the only company that could help abate this semiconductor shortage in the Western Hemisphere.\nPat Gelsinger has put forward an aggressive growth plan for Intel, which could see the company growing at ~10-12% CAGR from 2023-2027. However, Pat's plan is highly capital intensive, and so Intel needs more capital.\n\nIntel is set to enter a heavy capex-spending cycle with plans to increase capex for 2022 to ~$25B-$28B. With Intel's stock trading close to record low valuation (by P/FCF) from the past 10 years, raising capital through fresh equity issuance would be highly dilutionary for Intel's shareholders. Intel is one of the most-hated stocks on Wall Street, and the management certainly is not interested in alienating more of its investor base. Hence, a capital raise through equity is ruled out.\nAnother way to raise capital would be through debt issuance, and Intel's balance sheet and free cash flow generation are strong enough to allow for more debt. However, Intel's margins are set to come under pressure due to a potential price war with the likes of AMD, and with increased CAPEX-spending, Intel's free cash flows may suffer too in the near term. Hence, Intel's management could be unwilling to raise more capital via debt (which already stands at ~$40B).\nAsset monetization was probably the only viable alternative for raising capital to fund Intel's growth plan. And if we look at Intel's business, Mobileye is probably the most under-appreciated asset buried under a steep conglomerate discount. Mobileye is a category-leading business in autonomous driving (one of the hottest spaces in the market), and it would undoubtedly command a much higher trading multiple in the current market environment than what Intel paid for it back in 2017. Hence, the Mobileye spinoff is a very sound and logical decision from Intel's management.\nPat Says Mobileye Is Comparable To Tesla! Is It Though?\nIn 2017, Intel acquired Mobileye for an eye-watering sum of ~$15.3B. Since this acquisition, Mobileye has delivered significant revenue growth, achieved numerous technical innovations, and invested capital toward solving the most critical problems in the scaled deployment of autonomous driving technology. Unlike most IPOs, Mobileye is already a highly-profitable company. Hence, Intel could get a big return on its investment by selling a minority stake in Mobileye.\nIn the last 12 months, Mobileye has generated revenues of $1.36B, with operating profits coming in at $471M (operating margin of ~35%). Also, Mobileye achieved the milestone of delivering its 100 millionth EyeQ SOC, unveiled its production robotaxi (network coming live in 2022) and won 41 new ADAS and full self-driving programs with 30 legacy automakers. In a nutshell, Mobileye has taken tremendous strides both from a technical and financial standpoint.\nSince Mobileye has always operated as an independent subsidiary within Intel, the separation won't be hard. The strategic partnership with Intel will remain in place, and higher visibility should enable Mobileye to win more partners across the globe. With its robotaxi network set to go live in 2022, Mobileye is probably going to be the first to market in L3/L4 AV technology.\nMobileye is truly at an inflection point, and its future looks as bright as ever. Some critics would say that Intel is selling its future to chase the past. However, we must acknowledge the realities around us. The hype around autonomous driving and EVs has never been higher, and Mobileye's spectacular growth story is buried under Intel's umbrella. By bringing Mobileye to the public markets as a standalone entity, Intel is likely to receive a cash boost (at a rich trading multiple), whilst it will also maintain its majority stake (control) in the company.\nAlthough Pat compared Mobileye to Tesla (NASDAQ:TSLA) due to its AV technology (and future Robotaxi business), I think it's more comparable to Nvidia. For the purpose of this note, we shall create a guesstimate for Mobileye's valuation using trading multiples for both Tesla and Nvidia. Due to its relatively small size, I would expect Mobileye to command a higher multiple than these companies.\nLooking through the lens of relative valuation, Mobileye's IPO could be valued anywhere in the range of ~$50B to $70B. However, let us also determine Mobileye's absolute valuation using its financials.\nEstimating Mobileye's Fair Value\nTo determine Mobileye's fair value, we will employ our proprietary valuation model. Here's what it entails:\n\nIn step 1, we use a traditional DCF model with free cash flow discounted by our (shareholders) cost of capital.\n\nIn step 2, the model accounts for the effects of the change in shares outstanding (buybacks/dilutions).\n\nIn step 3, we normalize valuation for future growth prospects at the end of the ten years. Then, we arrive at a CAGR using today's share price and the projected share price at the end of 10 years. If this beats the market by enough of a margin, we invest. If not, we wait for a better entry point.\n\nIn step 4, the model accounts for dividends.\n\nAssumptions:\nMobileye is a rapidly-growing, highly-profitable business. With a massive TAM and leading ADAS & Autonomous Vehicle [AV] technology, Mobileye is set to ride an enormous secular growth trend as the shift to autonomous-driving EVs accelerates over the 2020s. Hence, a 10-year CAGR growth rate of 25% could be highly conservative. As the MoovitAV robotaxi network grows, Mobileye's margins are likely to head higher. Therefore, Mobileye's FCF margin could quite comfortably hover at more than 30% when the business matures, and growth slows down (not going to happen for another decade or two).\nAs you can see, Mobileye is worth ~$15 per share or ~$60B market cap. The assumptions utilized in this valuation exercise are conservative, which means Mobileye could be worth even more than $60B.\nIf Mobileye's 10-year CAGR revenue growth rate were to be in the 30%-50% range (instead of our estimate of 25%), Mobileye's fair value would come out to be ~$88B to ~$340B. At a $1T valuation, Tesla's implied 10-year CAGR revenue growth rate is ~50%. Since Mobileye is growing from a much smaller base, and considering the fact that it could become the industry standard for AV technology (by leveraging existing relationships with legacy automakers like Ford, BMW, and many others), I would imagine Mobileye has a better chance of delivering such hyper-growth than Tesla.\nEven after the spinoff of Mobileye, Intel would generate revenues of ~$73B in 2022 with virtually zero impact on its cash flow generation. Although Intel will lose one of its key assets in this transaction (not really, as Intel will still control Mobileye through a majority stake), the proceeds will help Intel's management execute its ambitious growth plans. Using conservative estimates, Intel (minus Mobileye) is still worth ~$70 per share (~$280B market cap) (this valuation exercise is available in my previous articles on Intel). Therefore, the Mobileye spinoff is very likely to unlock hidden value for Intel's shareholders.\nConcluding Thoughts\nWith Intel's market cap hovering at just about $200B, raising capital through stock issuance is not viable. Although Intel's balance sheet and free cash flow generation remain robust, the company is entering a heavy capex-spending cycle, which makes an additional debt raise troublesome. Mobileye is one of the faster-growing business lines at Intel. However, selling a small piece of it could yield a massive sum for Intel, which could be utilized toward Pat Gelsinger's ambitious growth plan for the company. According to my analysis, Mobileye could fetch a valuation of $50B-$100B in the current market environment, and I think Intel will end up raising ~$10B-$15B from the Mobileye IPO while retaining control of the company. I like this move from Intel's management as I can see significant value unlocking from this spinoff.\nIntel is a deeply undervalued cash cow that pays out a healthy, growing dividend. With the Mobileye IPO set to unlock some of Intel's hidden value, I expect to see big capital appreciation in Intel over the next 12-24 months. Therefore, I continue to rate Intel a strong buy at $50.\nKey Takeaway: I rate Intel a strong buy at $50.\nThanks for reading, and happy investing. Please share your thoughts, concerns, and/or questions in the comments section below.","news_type":1},"isVote":1,"tweetType":1,"viewCount":917,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":24,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/699649010"}
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