Peel Hunt confirms Seeing Machines could capture 70 per cent of the global auto market and proffers a 16p bull case target price, while reiterating its current 9p price target.
In an interesting note issued today, Peel Hunt analysts have clarified their thoughts regarding Seeing Machines, stating it is the leading company in the Driver Monitoring (DMS) space with the opportunity to capture around 70 per cent of the 90-100m cars sold globally each year.
In the note, its team of analysts Oliver Tipping, Damindu Jayaweera and James Lockyer, stated: “We believe Seeing Machines has a medium-term opportunity to sell Driver Monitoring Systems (DMS) to c.70% of the 90-100m cars sold p.a., equating to a c.US$650m/year market.”
They added: “By dissecting competitors’ KPIs, we conclude that Seeing Machines already has a leading position ahead of the market inflection.”
Of course it’s well-known that the EU General Safety Regulation (GSR), provides a layer of certainty as it mandates DMS in all cars by July 2026.
Moreover, from January 2026 the Euro NCAP 2026 protocols will require advanced, camera-based DMS if passenger cars are to achieve a 5 star rating. Given production lead times, I personally believe that means leading OEMs need to lock in this technology now for delivery by then.
Bull/Bear case
Peel Hunt explained its bull/bear case scenarios for Seeing Machines. Its bull case target price is 16p. Its bear case target price is 3.5p.
“Our bull case assumes Seeing Machines can win in the Chinese market. This sees cars on the road ramp to c.25m units. This is still lower than the 30m+ rear view mirrors Gentex ships p.a., so it is not an unreasonable number for a key player in the Automotive market.
Our bear case assumes that Seeing Machines only ever wins a 15% of its Total Addressable Market, equating to 10m cars on the road p.a. and that the ramp happens slower in the short term. We forecast a 46% growth rate for FY26E, vs 100% growth in our base case. A delay in adoption, and increased competition, especially in the rear-view mirror market, that leads to a lower market share are the two key risks.”
It should be borne in mind that even this valuation doesn’t fully reflect the huge growth that Gen 3 Guardian is likely to deliver in the current financial year. In my opinion, with contracts ranging from the tens of thousands to hundreds of thousands of units likely to be won by Seeing Machines there is ample scope for upgrades to every broker’s target price.
In addition, Aviation will provide further upside when Collins delivers its finished its AI-powered eye-tracking product for use in aeroplanes, in collaboration with Seeing Machines.
Of course, do you own research and don’t rely on the views of any single source before investing.
The writer holds stock in Seeing Machines