Serve Robotics Inc. /DE/ (NASDAQ: SERV)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0001832483
Market Cap 523.60 Mn
P/B 1.84
P/E -6.53
P/S 269.16
ROIC (Qtr) -34.57
Div Yield % 0.00
Rev 1y % (Qtr) 209.46
Total Debt (Qtr) 4.15 Mn
Debt/Equity (Qtr) 0.01
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About

Serve Robotics Inc., commonly known as SERV, is a privately held Delaware corporation that operates as a subsidiary of Uber Technologies, Inc. The company is a significant player in the development of advanced robotics technology, specifically focused on creating a mobility platform for last-mile delivery in urban areas. Serve's primary business activities involve the creation and deployment of sidewalk delivery robots. These robots are designed to navigate city sidewalks and interact with their environment in a safe and efficient manner. They...

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Investment thesis

Bull case

  • Healthy cash reserves of 116.84M provide 70.01x coverage of short-term debt 1.67M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of (56.86M) provides exceptional 125.30x coverage of interest expenses (453837), showing strong debt service capability.
  • Strong tangible asset base of 254.39M provides 61.34x coverage of total debt 4.15M, indicating robust asset backing and low credit risk.
  • Tangible assets of 254.39M provide exceptional 84796.33x coverage of deferred revenue 3000, showing strong service capability backing.
  • Free cash flow of (82.96M) provides exceptional 182.79x coverage of interest expense (453837), showing strong debt service ability.

Bear case

  • Operating cash flow of (56.86M) barely covers its investment activities of (127.07M), with a coverage ratio of 0.45, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (127.07M) provide weak support for R&D spending of 36.23M, which is -3.51x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 116.84M provide limited coverage of acquisition spending of (7.50M), which is -15.57x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (56.86M) provides insufficient coverage of deferred revenue obligations of 3000, which is -18954.80x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (56.86M) shows concerning coverage of stock compensation expenses of 19.54M, with a -2.91 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.37 2.28
EV to Cash from Ops. EV/CFO -7.20 37.14
EV to Debt EV to Debt 98.74 34.39
EV to EBIT EV/EBIT -5.08 27.71
EV to EBITDA EV/EBITDA -4.97 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF -4.94 133.36
EV to Market Cap EV to Market Cap 0.78 1.04
EV to Revenue EV/Rev 210.49 39.88
Price to Book Value [P/B] P/B 1.84 6.22
Price to Earnings [P/E] P/E -6.53 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.73
Dividend per Basic Share Div per Share (Qtr) 0.00 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 82.53
Interest Coverage Int. cover (Qtr) 177.73 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -383.45 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 129.49 118.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -160.47 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -165.49 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) -160.47 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) -142.05 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) -52.69 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) -240.65 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4,281.58 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.01 0.62
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 9.15 3.01
Current Ratio Curr Ratio (Qtr) 17.21 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.38
Interest Cover Ratio Int Coverage (Qtr) 177.73 12.34
Times Interest Earned Times Interest Earned (Qtr) 177.73 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -3,958.20 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) -4,146.37 -7,413.30
EBT Margin % EBT Margin % (Qtr) -4,123.04 -9,015.79
Gross Margin % Gross Margin % (Qtr) -481.30 -32.61
Net Profit Margin % Net Margin % (Qtr) -4,123.00 -7,962.06