Embark Stock: The Self Driving Investment You’ve Been Looking For
A decade ago, if you mentioned self-driving technology, people might’ve thought you were crazy. But, today, it is very much a reality. And a recent IPO, Embark stock, is leading the way.
Embark (Nasdaq: EMBK) went public on November 11th via SPAC. Being founded in 2016, the startup is making significant progress. Following the company’s IPO, Embark was valued at $5 billion. Yet since going public, the stock has struggled, and is now down 10%.
The self-driving market is expecting to reach over $64 billion by 2026, so the company has big potential. And on top of this, transportations costs are rising, with worker shortages everywhere. As a result, costs are getting passed onto consumers, making goods more expensive.
Can the self-driving startup solve a critical factor in the supply chain crisis? It has the potential. Let’s see what’s in store for Embark stock.
What’s Embark Stock All About
Embark makes software that turns regular trucks into self-driving machines. In particular, the company is focusing on the $700 billion trucking industry.
26-year-old founder/CEO Alex Rodrigues runs the company. With a strong background in robots, Alex is the right man for the job. With this in mind, Embark’s software enables trucks to run “semi-autonomously.” This differs from full self-driving in that the trucks will handle longer stretches of road.
For example, if a truck is bringing goods from the port of LA to Texas:
- A driver would pick up the goods, handling the city part of the driving.
- Then, the driver transfers the goods to an Embark enabled truck that drives the highway segment, typically the longest stretch.
- And lastly, a local driver will pick up the goods at their destination.
Altogether the process can make shipping safer with the software staying alert at all times. By simulating 1,200 scenarios per second, the program reduces human error. In fact, the company claims its software can:
- Increase fuel efficiency by 10%.
- Increase per truck revenue by 300% annually.
- Reduce delivery times by 40%.
If this is the case, then Embark has a MASSIVE opportunity ahead of it. Additionally, the company’s software as a service (SaaS) business model can generate consistent profits.
What to Expect From Embark Stock
So far, Embark stock is down 10% since going public just a few weeks ago. Despite the huge market potential, the ticker is relatively quiet for a self-driving startup. It could be because the company isn’t profitable yet as its technology is still being tested.
In the Near Term
Self-driving is one of the most exciting trends right now. The technology is promising to solve some of the biggest issues we face every day. Another AV startup that went public recently, Aurora Innovation (Nasdaq: AUR), was trending on socials, leading to an over 70% run.
Not to mention, Aurora currently has a market cap of over $13 billion, compared to Embark’s $3.5 billion. Yet Embark has 14,200 truck reservations already, with the number quickly growing.
With this in mind, the company isn’t expecting to turn a profit until 2024-2025. So, until the company proves it can generate a steady profit, Embark stock investors may see a bumpy ride.
In the Long Term
On the other hand, long-term investors could see considerable growth potential with the company’s superior business model. Because of Embark’s SaaS model, the company has potential with the trucking industry playing a critical role in society.
Also, Embark is partnering with top companies to boost its position. Here’s a look at the company’s deals so far.
- Nvidia – Providing the chips to power Embark’s interface.
- HP, BYD – Piloting electric trucks.
- Cummins, ZF – Partnering to support cross-platform abilities.
- Ryder – Adding up to 100 transfer points.
- Knight, Swift, Werner – All partnering U.S. carriers.
As can be seen, Embark is in a prime position to grow into the self-driving stock you’ve been looking for. Led by 26-year-old founder, the AV firm is rolling in the right direction.
Is Now the Time to Buy Embark Stock?
There’s no denying Embark stock has a ton of potential ahead of it. The new technology could be game-changing for the trucking industry. Will Embark be able to take advantage of the opportunity is the question.
Regardless, there’s a big truck driver shortage right now that’s disrupting markets globally. In fact, recent projections are showing the shortage could double, surpassing 160,000 by 2030.
If Embark’s technology can help solve even a part of the problem, demand for the product will skyrocket. And right now, Embark is trading at a discount when compared to the competition.
More importantly, Embark’s business model gives the company an advantage. By charging on a per-mile basis, the company is in better control of its revenue with higher profit margins. The fee will depend on the distance the goods are being shipped.
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As Embark grows, investors may experience volatility with new events emerging. But, if you’re looking for a long-term growth opportunity, Embark could be the right play. The company is leading the way for self-driving in the trucking industry.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.