Foresight Autonomous Holdings: Spending Growing Along With Successes
Edison | Dec 13, 2016 02:58AM ET
Foresight Autonomous Holdings Ltd (TA:FRST) has recently taken its marketing and R&D efforts up a notch, achieving a cooperation agreement with a top-3 Chinese OEM, an MOU with a leading French auto-parts supplier and successful tests of Rail Vision’s systems at Trenitalia. This was reflected in strong growth in R&D and marketing-related costs in Q3. Anticipating a continuation of this trend, we have increased our EPS loss forecasts for this year and next by 11% and 13%. Nevertheless, we note that a continuation of the marketing successes in recent months should further boost the group’s value proposition. We currently derive a DCF value of NIS3.11 per share.
R&D costs higher with staff hires
Foresight’s Q3 results show a reduction in quarterly EBITDA loss to NIS3.5m after NIS3.7m in Q216, but a key driver was a reduction in ESOP payments. Normalised EBITDA losses rose from NIS1.9m in Q2 to NIS2.7m, with R&D spending rising 56% q-o-q, reflecting increased hiring aimed at achieving the targeted proof of concept milestones in 2017 and an increased marketing focus by management.
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