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AEye shares soared more than 100% in morning trading.Roth Capital analyst Suji Desilva initiated coverage of AEye Inc with a Buy rating and $15 price target.

The analyst notes that AEye recently came public through a merger with special purpose acquisition company CF Finance Acquisition Corp. III that was announced in February 2021 and subsequently closed in August 2021.

Desilva expects AEye's advanced iDAR platform to gain traction in higher-order L3/L4/L5 ADAS/AV auto models, emphasizing more sophisticated highway driving safety.

Further, he believes a significant advantage of AEye's business model is using a high margin licensing/royalty-based revenue model with potential for gross margins of 80%-plus at scale.

The analyst also thinks AEye has secured a Tier-1 automotive partnership with Continental affirming, in his view, the strength of the company's lidar technology platform.