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The robotics sector has captured the imagination of investors for several decades. The potential for machines to perform human tasks is compelling, as it would help free up time for other productive activities. Since the launch of platforms such as ChatGPT, it seems companies are focusing heavily on automating processes and improving productivity, making robotics stocks a top investment choice in 2024.
In this article, I compare two robotics stocks to see which is a better buy right now.
Is Serve Robotics Stock a Good Buy?
Valued at $511 million by market cap, Serve Robotics (SERV) has been on an absolute tear in the last month, rising close to 500% in this period. Serve was spun out of Postmates, a subsidiary of Uber (UBER), and creates artificial intelligence (AI)-powered sidewalk delivery robots. The spinoff allows Serve to focus on the development and production of these robots and gain market share in an expanding market. Moreover, in July, market bellwether Nvidia (NVDA) disclosed it owns a 10% stake in Serve, driving the recent rally.
The adoption of e-commerce services globally is driving demand for last-mile delivery solutions, making Serve a top investment choice in 2024. Last year, Serve partnered with Uber Eats to deploy 2,000 sidewalk delivery robots in several U.S. platforms. In April 2024, Serve expanded its partnership with Magna International (MGA), a licensing partner, to manufacture delivery robots for Uber Eats.
In Q1 of 2024, Serve increased sales by 124% to $0.95 million, while daily supply hours almost doubled to 300. Analysts expect the company to increase sales to $1.64 million and $16 million in 2024. Serve remains unprofitable, but it raised $40 million in gross proceeds from its Nasdaq listing, providing it with the flexibility to support its cash burn rate.
Serve Robotics is covered by a single analyst, with a “strong buy” rating. The analyst's 12-month target price is $8, about 38.4% lower than the stock's current price.
What is the Price Target for Arbe Robotics Stock?
Arbe Robotics (ARBE) provides Perception Radar Solutions that enable safe driver-assist systems. The company claims its radar tech is 100x more detailed than any other radar on the market. It aims to empower automakers, autonomous ground vehicles, commercial and industrial vehicles, and a wide array of safety applications with advanced sensing technology.
Valued at $158 million by market cap, Arbe Robotics recently announced its Q2 results, and reported revenue of $0.4 million and an adjusted loss per share of $0.09. Comparatively, the consensus revenue estimate stood at $0.3 million, while its losses were forecast at $0.14 per share.
Similar to Serve, Arbe is also unprofitable, and reported an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) loss of $7.5 million, narrower than its prior-year loss of $8.4 million. With $8.8 million in cash and $17.7 million in short-term bank deposits, Arbe Robotics stock has some runway before burning out of cash.
Wall Street expects Arbe Robotics to report revenue of $1.47 million in 2024 and $32.25 million in 2025. Each of the four analysts tracking ARBE stock has a " strong buy” rating, and the average target price stands at $3.60 per share, more than 77% above the current stock price.
