If you're wondering why MicroVision (NASDAQ:MVIS) suddenly spiked 36% in trading at one point, it's not because the company discovered a new process, made a new deal, or just delivered a terrific earnings report. No, the biggest news connected to MicroVision lately is a familiar move that last sent GameStop (NYSE:GME) into the stratosphere: the involvement of notorious Reddit investment forum r/WallStreetBets.
What Stock Will Be the Next GameStop?
One of the leading questions around investing these days is “What stock will be the next GameStop?” After all, GameStop spent most of 2020 as a thoroughly anemic offering that aspired to close at $20 a share on any given day. 2021's arrival, meanwhile, saw it convert to a stock that briefly tasted the air near $500 a share, with a 52-week high of $483.
Few want to miss the opportunity to buy a stock with GameStop's price tag that sees it reach those same levels, and right now, the latest word suggests that the new target is MicroVision. MicroVision, a lesser-known firm that specializes in laser scanning technology used in image capture and 3D sensing tools, among other uses, spent much of its 2020 in the same way GameStop did, only more so. MicroVision couldn't quite clear the single-digit figures in closing prices for all of 2020, and could only breach the $10 mark at closing with the arrival of February.
This may well have drawn r/WallStreetBets' attention, as the company was measured over a reported 230 times on the forum in 24 hours. Given that the second place for mentions in 24 hours was for GameStop with 110 mentions, and third was Tesla (NASDAQ:TSLA) with 102 mentions, that means there's quite a bit of buzz on the forum about the company. The fact that mentions seemed to continue on from there suggests that it may not have been a temporary phenomenon. Recent trading saw the company up 36% at one point, and the gains not only held into the premarket but seem to be holding into the trading day today so far.
What Analysts Saying About MicroVision
Buying into a company on the strength of a Reddit forum's word might sound like a recipe for disaster, though after GameStop, perhaps less so than it once might have. The broader analyst pool, as based on our latest research, isn't providing a lot of support for anyone considering buying in.
In fact, the analyst pool isn't saying much about MicroVision period. The company has had a consensus rating of “hold” for over two years, and going back to November 2019 suggests that the only changes in the ratio are how many analysts are actually suggesting that “hold” is the best plan. Back in November 2019, it was three analysts. That dropped to just two in February 2020, and increased to four in May 2020. It held that figure all the way through January 2021, where it dropped to two again in March and has stayed there ever since.
As for a price target, our study of the analyst pool suggests that there hasn't been one issued since 2017, when S&P Equity Research established a long-since-meaningless target of $2.22 per share. The latest move of any sort came back in March, when HC Wainwright reiterated its “neutral” rating on the company with no price target established.
Should You Invest in MicroVision?
This leaves us with one basic question to answer: “Should I invest in MicroVision?”. The answer, meanwhile, does not look positive. Right now, the company is attractively priced; a flier of 50 shares will run around $1,000, which isn't exactly cheap, but then, virtually no one will be betting the farm on such a move.
Right now, there seems to be little going for MicroVision aside from r/WallStreetBets' buzz and a raging case of FOMO, Fear Of Missing Out. There is a case to be made in the company's fundamentals, however; it's working on being a player in the LiDAR arena, which is a technology that will prove valuable for self-driving cars, as well as unmanned aerial vehicles. There's also word it's making some headway in the augmented reality space as well, and AR does have several worthwhile applications in the real world, including the idea of turning car windshields into displays for navigation systems. If the FAA ever manages to get out of the way on unmanned drone delivery systems, it could be a real winner for the beleaguered restaurant market, much of which is still struggling to recover from pandemic restrictions.
There are reasons to buy in on MicroVision, but very few of them merit the kind of gains that the company has seen in the last several days. For those looking to get in, know that the risk will be fairly substantial in the short term. However, there is at least some chance that that could turn around going forward, especially if the company's moves in LiDAR and AR bear any fruit.
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