Boosted by new partnerships with Amazon (AMZN) and Qualcomm (QCOM), Visteon (VC) sports the highest-possible 99 Composite Rating as it revs up a potential breakout. Pioneering advances in artificial intelligence and autonomous driving technology for automakers, the company drove 778% earnings growth last quarter.
Earnings are due out Feb. 16 before the open.
Visteon provides automotive parts for vehicle manufacturers. It counts Ford (F) and General Motors (GM) as major clients. Its technology crosses a range of industries and applications, including AI, connected cars and cybersecurity.
The Michigan-based firm has roughly 10,000 employees at more than 40 facilities in 17 countries.
Fellow leaders in the Auto-Truck/Original Equipment industry group are also showing technical and fundamental strength. These include Allison Transmission (ALSN) and Adient (ADNT), which are setting up new buy points. Meanwhile, Mayville Engineering (MEC) has soared off its October lows.
Visteon partners Qualcomm and Amazon are both in recovery mode following a bear market that crushed tech stocks. Hinting at a potential rebound, QCOM stock is back above its 40-week moving average and AMZN stock has reclaimed its 50-day line.
Amazon And Visteon Team Up On Next-Gen Tech
As the end of 2022, Visteon and Amazon Web Services (AWS) announced a strategic collaboration to deliver the next generation of sustainable, intelligent and connected vehicle experiences. The partnership leverages Visteon's pioneering AllGo connected vehicle technology, which utilizes AWS world-class cloud capabilities.
The Visteon-AWS partnership touches every facet of the automotive industry, including manufacturers, vehicle app developers and consumers. The collaboration applies multiple AWS technology solutions across IoT, storage and computation categories. It includes a fast, secure cloud environment to handle critical connected vehicle activities that drive the auto's digital ecosystem.
Visteon And Qualcomm Put Digital Cockpit On Display
On Jan. 4, Visteon and Qualcomm announced the expansion of their existing technology collaboration. They plan to develop a high-performance cockpit domain controller designed to enable global automakers to build next-generation cockpits.
Visteon's SmartCore software integrates key automotive cockpit system functions. It combines digital instrument clusters and Android-based infotainment with cloud-enabled applications. These include navigation, radio, multimedia playback and voice smart assistant functions.
The SmartCore platform offers an integrated, white-labeled app store, delivering a highly-customized and regionalized experience for drivers across the globe. With new models using four or more cameras externally and up to two cameras inside the cabin, SmartCore features advanced vision processing capabilities.
These enable surround vision, driver monitoring and remote surveillance through the driver's smartphone.
Visteon showcased its digital cockpit solutions at CES 2023.
AI, IoT, Cybersecurity Drive 778% EPS Growth
In Q3, Visteon powered $1.58 earnings per share, representing stellar 778% year-over-year growth. While Wall Street expects earnings to slow 12% in the fourth quarter, full-year forecasts stand at 161% growth for the full year and 34% in 2023.
Sales growth has accelerated over the last four quarters, rising 63% in Q3. That lifted revenue for the quarter to just above $1 billion.
Visteon's ratings in IBD Stock Checkup are mixed. Annual pretax profit margins are light, at just 3.5%, and sales growth has averaged just 4% over the last three years.
But the stock's Accumulation/Distribution Rating is a healthy B, indicating more buying than selling over the last 13 weeks.
Visteon Drives Potential Breakout
After clearing a trendline entry, Visteon has earned a spot on IBD Leaderboard.
The stock is now trading just below a 152.20 buy point in a second-stage consolidation. Its relative strength line is climbing toward a new 52-week high. VC stock just cleared resistance and moved back above its 10-week moving average.
VC stock closed Monday's session just 1% below the buy point.
With earnings due Feb. 16, look for Visteon to build on the promise of outstanding partnerships with Amazon and Qualcomm and launch a new breakout move.
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