Microvision (NASDAQ:MVIS) stock enjoyed an incredible run-up when it was the most obvious pureplay company attempting to commercialize its light detection and ranging (LIDAR) technology.
LIDAR gives vehicles the ability to sense their surroundings. It can be a pivotal piece of a hardware package to enable autonomous vehicles.
Over the past year, however, various other LIDAR companies came to market via special purpose acquisition companies (SPACs). This removed the unique element from MVIS stock.
Several of Microvision’s competitors have a much more apparent technological foundation for their products and have strong partnerships and balance sheets to advance their products to market.
Microvision, by contrast, has very little to convince shareholders that its LIDAR technology will ever amount to a serious revenue-generating product.
As a result, MVIS stock has slumped from a 52-week high of $28 to just below $7 now.
Some traders might see that steep decline and think Microvision is a clear buying opportunity as year-end tax-loss selling winds down. Surely a beat-up stock like this has to bounce in 2022, right? Not so fast.
Microvision’s Dismal Track Record
In my previous coverage of Microvision, I highlighted the company’s decades-long track record of disappointment. It has long seemingly been on the cusp of achieving commercial success and then failed to deliver.
Time after time, the stock pops ahead of apparently imminent revenues, but then the product fails to gain any traction and MVIS stock slumps once again. On a split-adjusted basis, MVIS stock has fallen from $500 during the dot-com boom to just $7 now.
The most iteration of this hope and then failure cycle was around interactive displays. In 2019, the company talked up how it would start selling interactive displays in the middle of 2020.
Management felt that the firm had a good chance of achieving profitability shortly after the launch of these interactive displays.
Fast forward to today and Microvision doesn’t talk about interactive displays much anymore. That product line simply disappeared from the bull case almost entirely. Now, the company instead wants you to believe in its LIDAR technology. But will it work?
Quarterly Results: Nothing Good to See
On Oct. 28, Microvision released its latest set of quarterly figures. For Q3, revenues of $700,000 fell modestly short of expectations. That’s right, it couldn’t even bring in a million bucks of sales for the quarter.
Not surprisingly, given the tiny amount of revenues, the company generated another operating loss. This has almost come to be expected as the company has produced an operating loss each of the past decade.
Of note, however, the company burned through $10 million in cash this quarter. That was up sharply from the $3.5 million of cash burn for the company’s operations in the same period of 2020.
With Microvision burning through cash at a faster clip, that means that the timeline for more dilution is accelerating. More stock issuance will be a bearish development for MVIS stock.
All told, the company has now accumulated a shareholder deficit of $617 million since its inception. That’s right, Microvision has burned through more than half a billion dollars to produce virtually nothing.
That substantial shareholder investment has created a firm that generates less than $1 million in quarterly revenues.
Of course, management is now encouraging folks to stay loyal to the company. Forget about all the past efforts that went absolutely nowhere.
This time, the company’s new LIDAR products are going to take the market by storm. At this point, however, there’s little reason to suspect this to be the case. There are plenty of other publicly-traded lidar companies with more credible scientific teams and established partnerships with automobile manufacturers.
MVIS Stock Verdict
It’s tempting to look at a stock chart that has gone off a cliff and buy for the quick bounce. If people were willing to pay $28 for MVIS stock this spring, isn’t $7 a bargain?
The thing is, however, that a ton of growth stocks have gotten clobbered over the past six months. You can afford to be picky and buy companies with compelling products and strong leadership. We aren’t at a stage of the market where you have to buy something as speculative as Microvision to get exposure to growth.
Within the LIDAR space specifically, Velodyne (NASDAQ:VLDR) and Luminar (NASDAQ:LAZR) have both plunged in recent months and appear to have much more promising business outlooks.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.