On Wednesday autonomous truck developer Aurora Innovation (AUR 46.05%) reported a dog of a fourth quarter on paper, with no revenue and a net loss approaching $200 million. Yet its stock rocketed well higher, rising by 30% week to date as of early Friday morning, according to data compiled by S&P Global Market Intelligence. Here's why that happened.
Since Aurora is still a development-stage company, it's safe to say that few investors or analysts were shocked with that bottom-line deficit. After market hours on Wednesday, it reported that its bottom line was in the red to the tune of $193 million ($0.11 per share), which at least wasn't much deeper than the $192 million it shed in the same quarter of 2023. No revenue appeared in the financials.
But that might not be the case for too much longer. Aurora revealed in a shareholder letter itemizing the financials that it will launch commercial operations in April.
If all goes according to plan the rollout will see Aurora's autonomous trucks travel on public roads between Dallas and Houston -- a highly commercial route between the two large and important Texas cities. In the third calendar quarter of this year that reach will be extended to Dallas-vicinity Fort Worth, El Paso, and into Arizona with a connection to Phoenix.
Just as most Aurora observers likely expected fourth-quarter losses, I assume few are anticipating the company to earn gobs of revenue and book a profit immediately after launch. Nevertheless, when and if the big moment happens, it will be an important milestone for the company and a monster achievement, given the many challenges of developing autonomous vehicles.
The future looks exciting for the company, but investors should be cautious here -- there will be even more challenges with commercialization. Given that, this stock is still a very speculative investment, and thus recommended only for investors with an above-average tolerance for risk.
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