Serve Robotics: Don't Rush In Yet

seekingalpha08-20

Serve Robotics Inc. is a last-mile robot delivery service spun out from Uber, with plans to scale up to 2,000 robots by 2025.The company aims to generate $60-80 million in run rate revenues by the end...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nServe Robotics: Don't Rush In Yet\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-20 03:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4715696-serve-robotics-dont-rush-in-yet><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Serve Robotics Inc. is a last-mile robot delivery service spun out from Uber, with plans to scale up to 2,000 robots by 2025.The company aims to generate $60-80 million in run rate revenues by the end...</p>\n\n<a href=\"https://seekingalpha.com/article/4715696-serve-robotics-dont-rush-in-yet\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4585","symbol_name":"ETF&股票定投概念","start_time":0,"source_url":"https://seekingalpha.com/article/4715696-serve-robotics-dont-rush-in-yet","article_id":"2460066310","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1160746084/image_1160746084.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2460066310","pubTimestamp":1724096583,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Serve Robotics Inc. is a last-mile robot delivery service spun out from Uber, with plans to scale up to 2,000 robots by 2025.The company aims to generate $60-80 million in run rate revenues by the end","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4585":"ETF&股票定投概念","SG9999015945.SGD":"LionGlobal Disruptive Innovation Fund A SGD","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","SG9999015986.USD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (USD) ACC","BK4536":"外卖概念","SG9999015978.USD":"利安颠覆性创新基金A","LU2087625088.SGD":"ALLSPRING  US ALL CAP GROWTH \"A\" (SGDHDG) ACC","BK4535":"淡马锡持仓","LU1814569148.SGD":"WELLINGTON GLOBAL QUALITY GROWTH \"D\" (SGDHDG) ACC","SG9999014898.SGD":"United Global Quality Growth Fund Dis SGD","SG9999018857.SGD":"United Global Quality Growth Fd Cl Acc SGD-H","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","BK4550":"红杉资本持仓","SERV":"Serve Robotics Inc.","SGXZ31699556.SGD":"UGDP UNITED GLOBAL QUALITY GROWTH \"C\" (SGDHDG) ACC","BK4588":"碎股","BK4503":"景林资产持仓","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","SG9999014906.USD":"大华全球优质成长基金Acc USD","BK4551":"寇图资本持仓","BK4022":"陆运","SG9999014880.SGD":"大华全球优质成长基金Acc SGD","SG9999017495.SGD":"UGDP UNITED GLOBAL QUALITY GROWTH \"B\" (SGD) ACC","BK4230":"旅客陆运","BK4505":"高瓴资本持仓","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","UBER":"优步","BK4209":"餐馆","SG9999014914.USD":"UNITED GLOBAL QUALITY GROWTH (USDHDG) INC","SG9999018865.SGD":"United Global Quality Growth Fd Cl Dist SGD-H","SG9999015952.SGD":"LIONGLOBAL DISRUPTIVE INNOVATION \"I\" (SGD) ACC","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0082616367.USD":"摩根大通美国科技A（dist）","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","SHAK":"Shake Shack Inc"},"translate_title":"服务机器人：先别急着进去","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"UBER":1,"SHAK":1,"SERV":1},"content_text":"Serve Robotics Inc. is a last-mile robot delivery service spun out from Uber, with plans to scale up to 2,000 robots by 2025.The company aims to generate $60-80 million in run rate revenues by the end of 2025, helped by a recent deal with Shake Shack.The stock has a stretched valuation and short-term revenue challenges, but presents a promising future for investors willing to wait for a dip to buy.   sarawuth702 Serve Robotics Inc. (NASDAQ:SERV) is a unique opportunity to invest in last-mile robot delivery services. The company was spun out from Uber Technologies (UBER) back in 2021 and has a major deal with Uber Eats for food delivery. My investment thesis is Neutral on the stock, looking for a better entry point as the company ramps up to big numbers in 2025.   Source: Finviz Just Ramping Up Serve Robotics started trading on the Nasdaq back in April and the company just reported Q2 '24 results with meager revenues as follows:  Q2 GAAP EPS of -$0.27 misses by $0.02 Revenue of $0.468 million.  The key to the investment story is that Serve Robotics has massive plans to go from 48 operational delivery robots in Q2 to nearly 2,000 by the end of 2025. The company will finally achieve the scale to turn robotic food delivery into a real business.   Source: Serve Robotics Q2'24 earnings release The business benefits from taking the costs out of human deliveries and eliminates the need to tip. In addition, Serve Robotics has reported a higher delivery success rate despite the threats of vandalism and theft of unmanned robots. The company suggests the delivery failure rate is only 0.5 per 1,000 order, or 10x better than human drivers. The plan includes adding 250 robots to the Los Angeles network by Q1 '25. Serve Robotics has a goal of reaching 2,000 robots deployed by the end of 2025 with the addition of a new market, either San Diego, Dallas, or Vancouver.   Source: Serve Robotics Q2'24 presentation In essence, Serve Robotics will have 5x the delivery robots working by the end of Q1 with a goal of nearly 20x the robots by the end of 2025. The total number of robots working for Uber Eats will lead to $60 to $80 million in run rate revenues. The target is for each robot to produce ~$35K in annual revenues. The initial rollout would deliver ~$8.75 million in annual revenues when fully optimized within 6 to 12 months of starting deliveries. As part of the big robot and revenue boost in the next year, Serve Robotics signed a deal with Shake Shack (SHAK) to handle deliveries in Los Angeles via Uber Eats. The premium burger restaurant has up to 17 locations in the Los Angeles area and Serve Robotics will collect revenue from both the delivery fees, and advertising on the robots. As with other ad businesses, the company will benefit more from scale on the advertising side as the amount of delivery robots expands. Stretched Valuation The company has a bumpy path ahead, going from virtually no revenues in Q2 '24 to a revenue run rate in the $70 million range as 2026 starts. The market doesn't always handle these pre-revenue stocks very well. Serve Robotics reported a net loss of $9.0 million in the quarter, and the company will have to ramp up spending to grow robots in operations by 20x in 18 months. In addition, the autonomous delivery company will enter a new market in the next year, doubling local operations in the process. The majority of Q2 '24 costs were from stock-based compensation for R&D. Serve Robotics only spent sub-$3 million on actual operating expenses focused on delivery services. The company only burned $9.8 million in cash during the 1H'24, or ~$5.0 million per quarter. Serve Robotics raised $40 million going public and added another $15 million via a private placement in July. The company now has 48.2 million shares outstanding and a cash balance of around $43 million after the private placement. The stock now has a fully diluted market cap in the $580 million range, with Serve Robotics trading at $12 per share. Analysts don't have financial targets for the company. The lack of new robots and the end of the software revenues from Magna will lead to a very limited revenue picture in Q3 and Q4 before the new robots start deliveries. As mentioned above, the 250 new robots to start in LA by Q1 '25 would technically add up to $9 million worth of annual revenues starting in 2025, but a lot of the financial details depend on the rollout path. Serve Robotics would have enough autonomous robots in business to reach $2 million in quarterly revenues by Q2, but the ramp up could be slow. The stock will likely struggle to gain much from here in the short term, with limited progress in Q3 and the loss of software revenues. Serve Robotics will continue burning cash and the new 2,000 robots won't come cheap, though the company appears to have some equipment financing in place for now. Takeaway The key investor takeaway is that Serve Robotics Inc. has a promising future in delivery robots, but the company will have a rough few quarters ahead. The market tends not to handle short-term pain well.  Investors should hold off on buying the stock and use any dips in the future to load up. The current market cap is much more appropriate a year from now when new delivery robots are hitting the sidewalk and Serve Robotics has successfully executed entering a 2nd market.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.4","shortVersion":"4.26.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2460066310"}