Does Aurora Innovation Stock deserve a place in your portfolio?

Founded in 2017, Aurora Innovation, Inc. (AUR) in Pittsburgh, Pennsylvania, is an independent technology company. On November 4, 2021, the company went public through a reverse merger with special purpose acquisition firm Reinvent Technology Partners. AUR raised $2.50 billion in cash through the reverse merger, valuing the company at $11 billion.

AUR Co-Founder and CEO Chris Urmson said, “This will unlock the capital we need to deliver the Aurora Pilot as a service at scale.”

However, AUR’s shares are down 59.2% since their stock market debut. Additionally, the stock is down 66.2% year-to-date and 16.4% over the past month.

Here’s what could shape AUR’s performance in the short term:

Bad finances

AUR’s collaboration revenue was $42 million in the first quarter of fiscal 2022, ended March 31, 2022. However, its operating loss was $143.14 million, while that his net loss amounted to $76.81 million. Its loss per share was $0.07 and its adjusted EBITDA loss was $108.11 million.

Its net cash outflow from operations was $135.81 million last quarter. Cash and cash equivalents fell 41.5% year over year to $520.69 million. Its net investing cash outflow was $971.58 million, compared to a cash outflow of $291.06 million in the prior year quarter.

Poor growth prospects

Analysts expect AUR’s revenue to be $48.62 million in its fiscal year 2022 (ending December 31, 2022), indicating a 41.1% decline in one year to the next. Additionally, the consensus revenue estimate of $2.80 million for its fiscal year 2023 indicates a 94.2% decline from the same period last year.

In addition, Rue expects AUR’s EPS to remain negative until at least fiscal 2023. Additionally, the negative consensus estimate of EPS of $0.87 for fiscal 2023 indicates a down 8.7% year-over-year.

Foamy rating

In terms of futures price/sales, the AUR is currently trading at 93.63x, which is 7281.4% higher than the industry average of 1.27x. Additionally, the stock’s 65.48 EV/Sales multiple is 4061.1% higher than the industry average of 1.57.

AUR’s EV/EBITDA ratio is negative at 3.68. But the 12-month price-to-book multiple of 1.32 is 45.1% below the industry average of 2.41.

POWR ratings reflect bleak outlook

AUR has an overall F rating, which translates to strong selling in our own POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

AUR has an F rating for value and D for quality. The stock’s negative EV/EBITDA is in line with the Value rating. Additionally, the last 12 months of AUR DEER minus 33.75% justifies the quality score.

Of the 79 shares listed C Technology – Services industry, AUR is ranked #76.

Beyond what I said above, check out AUR Ratings for Growth, Sentiment, Stability, and Momentum here.

Conclusion

AUR plans to launch its autonomous technology in Volvo and Paccar 8 trucks by the end of 2023. It is also in partnership with Uber (UBER) and Toyota (MT). The company is currently developing Level 4 autonomous driving technology, in which human interaction is not required. However, it may take some time for AUR to generate revenue from this technology. Since UR’s core products and services are still under development, we believe it’s best to avoid stock now.

How does Aurora Innovation (AUR) compare to its peers?

Although AUR has an F rating in our proprietary rating system, one might consider looking at its industry peers, Fujitsu Limited (FJTSY), Information Services Group, Inc. (III) and Celestica, Inc. (CLS), which have an A (Strong Buy) rating.

Note that III is one of the few stocks hand-picked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.


AUR shares were trading at $3.89 per share on Monday morning, up $0.02 (+0.52%). Year-to-date, the AUR is down -65.45%, compared to a -15.67% rise in the benchmark S&P 500 over the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the dos and don’ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing stocks. After…

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