Autonomous technology company Aurora Innovation, Inc. (AUR) in Pittsburgh, Pa., recently completed its business combination and began trading on November 4, merging with special purpose acquisition company (SPAC) Reinvent Technology Partners Y, and raising over…
$1.80 billion in gross proceeds. The stock has gained 6.9% in price since its public debut.
Wall Street analysts expect the stock to hit $14 in the near term, which indicates a potential 16.6% upside.
However, AUR is currently trading 32.4% below its all-time high of $17.77, which it hit on November 19, 2021. Moreover, the entire automotive industry is facing severe semiconductor chip and labor shortages, which could hamper the company’s production plans. So, AUR’s near-term prospects look uncertain.
Click here to checkout our Electric Vehicle Industry Report for 2021
Here is what could influence AUR’s performance in the upcoming months:
Retail Trader Optimism
As major car manufacturers race to develop self-driving cars, autonomous driving technology is deemed the “next big thing” in the automotive industry. AUR’s shares soared primarily on investor optimism. According to a Bloomberg report published on November 20, the stock was widely cited on social media platforms — Twitter and StockTwits.
Stretched Valuation
In terms of forward EV/S, AUR’s 275.87x is 12,977.8% higher than the 2.11x industry average. Similarly, its 54.27x forward P/S is 3,196.5% higher than the 1.65x industry average. And the stock’s 10.38x forward P/B is 246.5% higher than the 3x industry average.
POWR Ratings Don’t Indicate Enough Upside
AUR has an overall C rating, which equates to a Neutral in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. AUR has a D grade for Value, which is in sync with its higher-than-industry valuation ratios.
The stock has a D grade for Quality. AUR’s trailing-12-month ROTC and ROTA are negative, compared to the 6.73% and 5.19% respective industry averages, justifying the Quality grade.
AUR is ranked #45 out of 75 stocks in the D-rated Technology – Services industry. Click here to access AUR’s ratings for Momentum, Sentiment, Stability, and Growth also.
Bottom Line
The ongoing semiconductor and labor shortage could lead to unexpected delays and…
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