Cruise operator Viking targets $11 billion valuation as IPO market stays hot

Table Of Content

• Related Stocks
• BlackRock doubled spending on security for CEO Larry Fink amid growing backlash to ESG investing
• Funding, Valuation & Revenue
• Market Expansion and Price Sensitivity
• Cruise operator Viking targets $11 billion valuation as IPO market stays hot
• Onboard Prices for Norwegian Cruise Line's Norwegian Breakaway

Its technology facilitates localization and mapping, perception, prediction, planning and control, autonomous driving infrastructure, and more. Cruise plans eventually to expand its offerings beyond San Francisco with four- to six-passenger Origins but needs permission from the National Highway Traffic and Safety Administration to put the shuttle on public roads. The vehicle needs a government exemption because it has no steering wheel or manual controls.

Related Stocks

We already discussed that it is currently trading at a traditional car manufacturer's P/E ratio, so the $20 billion value of Cruise should be added to its market cap. This would give it a market cap of $100 billion, or a 25% higher stock price of more than $86 per share. Since these sophisticated investors only make investments they think will be worth a lot more, then the value of cruise is most likely much higher. It will launch its ARS in San Francisco this year and then ramp it up quickly when the Origin is available next year.

BlackRock doubled spending on security for CEO Larry Fink amid growing backlash to ESG investing

Activist investor Engine No. 1, which has said it invests in companies that have a positive impact on workers, communities and the environment, disclosed Monday that its stake in GM is passive. They have been heavily investing into the company, which has meant some great progress in developing self-driving cars based on the Chevy Bolt EV. GM's 2025 estimate of 50,000 ARS vehicles would equate to approximately 4.2 billion miles, which would only be a small percentage of the estimated US ridesharing market of more than 200 billion miles. The third level of the business model adds the overall operating expenses for R&D, Sales & Marketing, and General & Administrative costs.

Funding, Valuation & Revenue

The timing for the planned announcement on fares makes sense for Cruise. The California Department of Motor Vehicles last week gave the company a permit to charge fees for autonomous vehicle services. That means Cruise can operate delivery services for a fee using its self-driving cars without a safety driver. All autonomous vehicle operators need approval from the Public Utility Commission to charge passengers for rides in the state.

Market Expansion and Price Sensitivity

There were social concerns, too, notably fears of increasing social inequality due to the affordability gap between those who could access electricity and those who could not. The sophistication of transformative technology often leads to a perceived loss of control, further fueling skepticism due to fears of unintended consequences. Technological determinism further stirs the debate - the belief that technology steers society in preset directions, often wresting control from individuals and communities. To address this discrepancy, the automaker increased its full-year EPS diluted adjusted guidance by $0.25. The automaker has said it expects Cruise to bring in $50 billion in annual revenue by the end of the decade.

Exclusive: GM's Cruise valuation slashed by more than half, adding to woes - Reuters

Exclusive: GM's Cruise valuation slashed by more than half, adding to woes.

Posted: Thu, 29 Feb 2024 08:00:00 GMT [source]

Cruise operator Viking targets $11 billion valuation as IPO market stays hot

San Francisco is its initial market for ARS, while Phoenix is for autonomous delivery. GM is a profitable company trading at $26.85, a minuscule P/E of 3.8. Sure, there may be more downside with the current turmoil over Cruise, the cost impact of the recent strike, and concerns about auto sales and EVs. Over the longer term, GM has a substantial upside even without Cruise. Adding in the potentially significant value of Cruise, GM provides a genuinely unique long-term investment opportunity today. Let's not forget that this is an inevitable and enormous market opportunity for Cruise.

In this article, I'll explain what GM Cruise needs to do to recover, and I expect it to pursue something like this. I'll reiterate briefly why autonomous ridehailing services are an enormous opportunity. But first, a brief history lesson to remind everyone that transformational technology always faces criticisms, opponents, and hurdles. Its technology includes camera-based driver monitoring that works both day and night to alert the driver. While Microsoft’s capital is important, the partnership might provide equal and longer-term value for Cruise, at least in the two companies’ views. Under the long-term strategic partnership, Cruise will use Azure, Microsoft’s cloud and edge computing platform, for its yet-to-be launched autonomous vehicle ride-hailing service.

Over time, the introduction of regulations and improvements in automobile design and infrastructure addressed many of these early concerns, paving the way for cars to become a primary mode of transportation. With its rapid communication, the telegraph was suspected of potentially eclipsing traditional, personal communication modes. Television, now an entertainment mainstay, was initially viewed as a potential intellectual drain, pulling people away from 'worthier' pursuits like reading. Let's look more closely at the introduction of two major transformative technologies for the lessons we can learn.

Cruise's valuation halved after its driverless car hit and dragged a woman - The Register

Cruise's valuation halved after its driverless car hit and dragged a woman.

Posted: Mon, 04 Mar 2024 08:00:00 GMT [source]

Cruise Autonomous Ride Services

(Reuters) -General Motors' Cruise saw its internal share price cut by more than half from a quarter ago as the fallout from an October accident continues to weigh on the self-driving car company. Previously discussed estimates were more than $150 billion by 2025 or 2026, in excess of $500 billion in the U.S., and more than $1 trillion globally in 2030. Let's assume that Cruise has 20% of this market, which is a conservative assumption since it is expected to be second to the market, has a good strategy, and is well-positioned. Its ridesharing app, called Cruise Anywhere, enables riders to request a ride from its ARS vehicles. Cruise is also developing an ARS dispatch platform to manage a fleet of AVs in each metropolitan area.

Estimated Gross profit for 1,000 AVs is $82 million, increasing proportionately with the size of the fleet. In this article, I will explain the implications of these, and I will also translate GM's timeline for Cruise into financial projections. For anyone interested in the specific costs, comparative advantages, and details of market opportunity, I refer you to my August article GM/Cruise Is Off And Running. I set out Cruise's strategy in that article, but now it needs to change based on current events, and it is probably set back almost a year. They use their financial resources, political connections, and lobbying to hinder the introduction of autonomous vehicles. The next time you read about political opposition to the introduction of autonomous vehicles or a sensational article criticizing AVs over something trivial, ask yourself who may be behind it.

The company is working toward submitting a permit application with the agency. This week’s presentation won’t just focus on GM’s plans and technology, the emphasis will be on how the automaker plans to start increasing revenue and profit with new vehicles and business lines. After paring the size of the core auto business overseas, Chief Executive Officer Mary Barra will lay out a road to growth.

Ammann is expected to show how Cruise can increase revenue to $50 billion or more and provide analysts with details on cost per mile to consumers. The presentation will show how some big-name companies took years to get to that kind of revenue, the people said. What would be the valuation of a technology-based company with $30 billion in revenue in a profitable and rapidly growing market? Easily it could be valued at more than $100 billion with an expected value by 2030 of more than $500 billion. In fact, a 10X multiple of revenue would not be out of the question, and this would be $300 billion.

This is undoubtedly the case with autonomous ridehailing services. Last week, Ibotta rose 17% during its first day of trading after pricing at $88. Rubrik, a Microsoft-backed cloud data security provider, is scheduled to list shares on Thursday and could raise as much as $713 million.

GM reportedly continues to own approximately 70% of Cruise, although this is unconfirmed. Based on these estimates, Cruise would have a value of approximately $20 billion to GM. We will consider the case for each of these as well as the potential impact each has on GM's overall valuation, but first, let's look a little more at autonomous ride services and then Cruise. Additionally, there will be costs for managing the fleet, including dispatch staff, fleet facility costs, support costs, local marketing, etc. For 1,000 vehicles, fleet operations costs compute to be $8 million on fleet revenue of $150 million and a contribution of $90 million after the vehicle costs.