Aeva jumps 26% on exclusive deal to supply lidars to European automaker

Shares of Aeva Technologies, a small manufacturer of lidars that help autonomous vehicles recognize objects around them and their trajectory, soared almost 26% yesterday, December 3. The rally followed the company’s announcement of a new exclusive contract with a European automaker. Wall Street believes Aeva shares could rise more than 70% from here.

Aeva shares rose almost 26% on the Nasdaq yesterday to $13.70 apiece. In early trading this morning, the stock has continued to climb, adding another 7% as of this writing.

Investors reacted to the company’s announcement of an exclusive contract to supply lidars to a European car manufacturer. Aeva does not disclose the automaker’s name or the value of the contract. Investment banks Morgan Stanley and Canaccord Genuity believe the customer is Mercedes-Benz, Reuters writes.

The agreement runs for 10 years and covers all markets except China, as well as all of the automaker’s models – internal combustion engine, hybrid, and electric, Aeva said in a press release.

Aeva, which has a market capitalization of about $820 million, specializes in next-generation lidar technologies, so-called 4D lidars. Its sensors can use a laser to simultaneously measure the distance and speed of objects, anticipating their trajectory, which, according to the company's data, leads cars and robots to make smarter and safer decisions.

So far, such technologies are used by manufacturers of commercial vehicles, while passenger cars are equipped with lidars that can create only a three-dimensional image of nearby objects, according to the press release. The European company will be the first in this segment to switch to 4D lidars, Aeva says.

Its technologies are used in other industries as well. For example, Tampa International Airport in Florida plans to use them to "optimize airport operations, enhance public safety and security, and improve the passenger travel experience," and D2 Traffic for traffic-management.

Since the beginning of the year, Aeva shares have risen 188%. Still, four Wall Street analysts rate them "buy" versus "hold," MarketWatch data shows. The average target price of $24.10 per share implies upside of 73% versus the last closing price.