In a rare move, a prominent Wall Street firm has initiated coverage of Mobileye Global Inc. with a negative rating, directly targeting core risks. The autonomous driving technology company saw its stock price plummet by over 8% on Monday following the report. Jefferies assigned Mobileye an "underperform" rating and set a price target of $8.

Despite Mobileye's association with popular concepts like robotaxis and humanoid robots, analyst Vanessa Jeffriess noted that these long-term opportunities are insufficient to offset immediate challenges. The report highlights that the company's near-term growth prospects are limited, particularly as key customer Volkswagen Group is developing some autonomous driving technology in-house. This exposure to a major client has raised widespread market concerns.

The bearish report arrives even as Mobileye recently posted stronger-than-expected first-quarter results. In late April, the company reported a 27% year-over-year increase in quarterly revenue to $558 million, driven by robust demand from Chinese automaker exports. Adjusted earnings per share also exceeded market expectations.

However, management struck a cautious tone during the subsequent earnings call. The company projected a roughly 6% year-over-year decline in second-quarter revenue and emphasized that its raised full-year growth guidance primarily reflects the first quarter's strength, with the outlook for the remaining three quarters "largely unchanged." Additionally, Mobileye recorded a substantial $3.8 billion non-cash goodwill impairment charge in the first quarter, casting a shadow over its path to profitability.

Currently, Mobileye faces structural pressures, including peaking shipments of traditional ADAS chips and the slow commercialization of advanced autonomous driving systems. While the company has made breakthroughs in the Indian market and announced a new share repurchase plan, Jefferies' bearish stance and potential competitive risks from Volkswagen remain key obstacles to a valuation recovery.