Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<ul><li>1Q23 revenue came in at the midpoint of guidance at $0.6 million.</li><li>CEO Matt Fisch has been making changes and said that after “a comprehensive review of AEye’s business, it was clear that we needed to intensify our focus on automotive and our path to commercialization with Continental, while aligning our resources with this streamlined business model.”</li><li>The company’s automotive-first strategy, capital-light model, and strategic partnership with Continental should position it well in the upcoming LiDAR market. </li></ul>

1Q23 revenue came in at the midpoint of guidance at $0.6 million.CEO Matt Fisch has been making changes and said that after “a comprehensive review of AEye’s business, it was clear that we needed to intensify our focus on automotive and our path to commercialization with Continental, while aligning our resources with this streamlined business model.”The company’s automotive-first strategy, capital-light model, and strategic partnership with Continental should position it well in the upcoming LiDAR market. 

AEYE, INC - Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well

<ul><li>Last night, AEye filed an 8-K announcing that it will restructure and reduce its workforce by approximately one-third, effective April 3, 2023.</li><li>This reduction in force (RIF) is part of the company’s revised strategic plan that it will announce on its May earnings call.</li><li>The company expects the new plan will include other significant operating expense reductions.</li></ul>

Last night, AEye filed an 8-K announcing that it will restructure and reduce its workforce by approximately one-third, effective April 3, 2023.This reduction in force (RIF) is part of the company’s revised strategic plan that it will announce on its May earnings call.The company expects the new plan will include other significant operating expense reductions.

Reducing Workforce by One-Third Part of New Strategic Plan to Refocus the Company

<ul><li>CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.</li><li>CFO Bob Brown announced that he is leaving the company effective March 31.</li><li>Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”</li></ul>

CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.CFO Bob Brown announced that he is leaving the company effective March 31.Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”

New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a> has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/hesai-group-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:95074" rel="noopener">Hesai Group IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/hesai-group-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:95100" rel="noopener">Hesai Group IPO: The Bear Case</a>. </li>
<li>In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We would pass on the IPO.</li>
</ul>



Hesai Group (HSAI US) has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.
We previously discussed the IPO in Hesai Group IPO: The Bull Case and Hesai Group IPO: The Bear Case. 
In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We would pass on the IPO.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a> has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.</li>
<li>In <a href="https://www.smartkarma.com/insights/hesai-group-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:95074" rel="noopener">Hesai Group IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on continuing pricing pressure, declining contract liabilities, gross margin decline, ongoing losses, worsening cash conversion cycle and FCF burn.</li>
</ul>



Hesai Group (HSAI US) has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.
In Hesai Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on continuing pricing pressure, declining contract liabilities, gross margin decline, ongoing losses, worsening cash conversion cycle and FCF burn.


United States

AEye, Inc. manufactures defense equipment. The Company designs mission-critical targeting systems for fighter jets that searched for, identified, and tracked incoming threats. AEye serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

AEye (LIDR US)

AEYE, INC - Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well

The company’s automotive-first strategy, capital-light model, and strategic partnership with Continental should position it well in the upcoming...

Water Tower Research

Reducing Workforce by One-Third Part of New Strategic Plan to Refocus the Company

Last night, AEye filed an 8-K announcing that it will restructure and reduce its workforce by approximately one-third, effective April 3, 2023.

Water Tower Research

New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations. CFO Bob Brown announced that...

Water Tower Research

Hesai Group IPO: Valuation Insights

In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We...

Arun George

Hesai Group IPO: The Bear Case

The key elements of the bear case rest on continuing pricing pressure, declining contract liabilities, gross margin decline, ongoing losses,...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)