MicroVision (MVIS) The shareholders have asked and Sumit Sharma has DELIVERED! Let’s unpack it all🔥

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Summary
 
MicroVision trades almost entirely on meme hype and the fact that it has a high short interest.
The Lidar technology firm has almost no revenues and no clear path for monetization.
Yet, MicroVision, a firm in its development stage, trades at 571 times sales and 35 times book value.
MicroVision is poised to fall to its pre-hype price.
Top view of self-driving SUV on the road with sensing graphic pattern retouched
Chesky_W/iStock via Getty Images
MicroVision (MVIS) has occasionally been floated on Reddit's WallStreetBets as another short squeeze target. Other than having a high short interest ratio, I have not heard a good argument to buy the stock. MicroVision's financials look terrible and the high market value can't be sustained.
 
A look at MicroVision's short interest ratio
 
Meme stocks like AMC Entertainment (AMC) and GameStop (GME) have defied expectations this year and created four-digit stock returns. Retail traders band together on WallStreetBets and egg each other on to buy shares of meme stocks in hopes of igniting a short squeeze, so companies that are heavily shorted are obviously interesting targets for the Reddit army. Companies like AMC Entertainment and GameStop became memes chiefly because they have seen their short interest ratios hover around 20% earlier this year, but short interest has dropped lately. MicroVision also has a high short interest ratio: Out of 158M shares outstanding, 29.7M shares of MicroVision have been sold short which calculates to a short interest ratio of 19%.
 
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Data by YCharts
A closer look at MicroVision's financials
 
The problem with MicroVision, however, is that the company's financials look really bad… and are much worse than for AMC, for example, which saw its business get shut down because of COVID-19.
 
Micron develops Lidar sensors which is a technology that is used in autonomous driving. Lidar stands for "laser imaging, detection, and ranging" and uses sensor technology to map the environment. Lasers emit light to mark a target and measure the time it takes for the light to return. This allows computers to make sense of the environment which then enables autonomous driving. Lidar sensors are not only used in autonomous driving, however. They have applications in forestry, geology, mining, and even law enforcement. Police officers use Lidar technology to identify drivers that drive above the speed limit. The Lidar market is expected to grow from $1.6B in 2019 to $3.8B in 2025 with the automotive sector expected to see the largest growth rate of 114% annually.
 
 
 
(Source: Yole Lidar Market Forecast)
 
Despite the large and expanding addressable market, MicroVision has not been able to convert the opportunity into profits… or even revenues. MicroVision had just $8.9M in revenues in FY 2019, a figure that dropped to just $3.1M in FY 2020. Actual product revenues dropped 75% Y/Y in FY 2020 to just $1.3M. MicroVision's product revenues in Q1'21 were $0 and total revenues were less than half a million dollars. In both years, MicroVision has racked up staggering operating losses…
 
 
 
(Source: MicroVision)
 
Yet, MicroVision has a market value of $2.4B… and the market capitalization has been much higher occasionally as the Reddit army pushed for a short squeeze...
 
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Data by YCharts
MicroVision is way overvalued at $15
 
Lidar may be a sexy business and applications in autonomous driving are clearly understood. MicroVision itself has made many announcements in the past about its research and development successes, but so far monetization of the firm's Lidar technology has failed, which not only raises questions about the marketability of MicroVision's technology but also about its revenue path going forward.
 
MicroVision is expected to have revenue of only $4.2M this year and no profits, so the Lidar technology company has a market-capitalization-to-sales ratio of 571… this is sales, not earnings! And, mind you, this multiplier factor is for a company that has no established record of securing revenues and showing operating profits. MicroVision also trades at a P-B ratio of almost 35… which means that the market values MicroVision's equity at thirty-five times its actual book value. Apple (AAPL), arguably