Aurora Innovation NASDAQ:OR The stock price rose more than 50% following news of a partnership with NVIDIA Nasdaq: NVDA. Although there are hurdles to overcome, the stock price could easily rise another 100% or more this year because the stock price is undervalued. The deal with NVIDIA is part of NVIDIA’s push into a broader range of end markets focused on its AI technology. NVIDIA is seeking to disrupt the autonomous driving industry, and Aurora is an important piece of the puzzle. NVIDIA provides the hardware and software needed to run the Aurora platform, while Continental provides… OTCMKTS:CTTAF You will put the ingredients into a marketable package. The target market is large trucks, which will undoubtedly include other types of vehicles over time.
Aurora Innovation Today
Aurora Innovation
Effective 01/08/2025 at 04:00 PM ET
- 52 week range
- $2.10
▼
$9.83
- Price target
- $6.30
Unlike other technological developments, this product is scheduled to enter production this year. The plan is for an initial market launch in May, with mass production starting in 2027. The deal calls for the production and deployment of products on a large scale, capturing a significant portion of the global autonomous vehicle market. What Aurora investors can benefit from is that this deal validates the business while quickly accelerating revenue and profitability expectations. As it stands, the 10 analysts tracked by MarketBeat expect extreme four-digit growth in 2025, triple-digit growth in the next four to five years, and strong high-double-digit growth for several years after that. In terms of valuation, the company’s P/E ratio in this scenario is around 12x in 2030, which is deep value for a fast-growing technology company.
Internal, institutional and analyst trends are bullish for Aurora stock
Analyst trends favor Aurora Innovation’s stock price to rise. Trends in 2024 and the first weeks of 2025 include increasing coverage and price targets, with the consensus rating pegged at Hold and the consensus rising more than 40% in 12 months and nearly 25% from December 2024 to January 2025. Consensus is lagging expectations. Price action in January. However, the latest targets, including one released after NVIDIA’s announcement, put this stock at $10 to match the critical resistance target, which is the price the stock traded at when the SPAC merger closed in 2021.
Insider and institutional ownership of this company is strong and helps push the stock price higher. Insiders have been selling over the last year, with nearly 100% of the sales coming from investor Reid Hoffman. Hoffman is best known for his role in founding LinkedIn and as an early investor. However, insiders own about 15% of the shares, including a large chunk of Hoffman. On the other hand, institutions have been buying this stock on a quarterly basis for six straight quarters and now own about 45% of the stock. Our institutional buyouts are wide-ranging and include leading firms such as JPMorgan Chase, Franklin Resources, and State Street, as well as public and private venture capital and specialist fund managers.
Aurora has the capital necessary to achieve profitability
Aurora diluted its stock by 15% in F2024, and there is a risk of additional dilution, but it is diluted for now. The company has raised approximately $0.5 billion in funds, bringing cash, cash equivalents and long-term investments to more than $1.35 billion. This leaves the company in a net cash position relative to total liabilities, with enough cash and investments to cover approximately 10 quarters of operations at Q3 burn rate; The company will be profitable before then. Liability is approximately 0.18x cash and investment and 0.1x assets.
Technical Outlook: Aurora’s stock market is nearing a boil
The Aurora stock market has been simmering for months, with high trading volume driving price action higher. The stock price is showing a clear bottom at the $1.50 level, surpassing the trigger point in late 2024. The trigger point is the base line/neckline of the reversal pattern, and has been confirmed as support. A rise in prices in 2025 confirms support at this level and indicates prices will rise over time. With this in play, the market will likely reach the $10 level to retest the crucial resistance target again soon. Assuming the market can move above it, it will likely move up into the mid to upper teens. At this price point, this stock would trade at a valuation that is better aligned with growth expectations.
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