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Aurora Innovation: On Track To Launch By End Of 2024

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Autonomous transportation. Driverless automotive.

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Summary

Since I first discussed Aurora Innovation (NASDAQ:AUR) arsenic a imaginable investment, my sentiment has not shifted. In fact, nan results of 4Q22 person reassured maine that AUR is good connected its measurement to achieving its commercialization goals. Thus, I maintain my bargain proposal connected AUR. During nan quarter, AUR reached a number of method milestones, including nan merchandise of Beta 5.0. I spot AUR's expertise to instrumentality to its anterior scheme arsenic a affirmative sign, moreover though it still has a number of method capabilities to execute and trial earlier launch. I proceed to judge that AUR is among nan manufacture leaders successful nan autonomous trucking sector. True, investors whitethorn beryllium taking connected much consequence coming owed to a deficiency of profits and nan anticipation that nan commercialization timeline whitethorn beryllium extended. However, nan risk/reward ratio is highly asymmetrical successful my view. If AUR achieves its FY27 targets, arsenic I person modeled successful my erstwhile post, it should reap a sizable reward.

4Q22 results

The astir important takeaway is that guidance reaffirmed its roadmap to commercialized launch, stating that nan AUR Driver level is still expected to beryllium fresh by nan extremity of 2023, pinch commercialized motorboat anticipated by nan extremity of 2024. The truth that AUR has $1.1 cardinal successful rate connected nan books is besides encouraging, arsenic this magnitude should beryllium capable to support nan business afloat until astir midway done 2024.

Tech and roadmap updates

Released during nan quarter, AUR Beta 5.0 included caller features that let nan AUR Driver to admit and respond appropriately to moving emergency vehicles that do not ever adhere to modular roadworthy regulations. Moreover, nan Fault Management System introduced nan erstwhile twelvemonth was expanded upon successful Beta 5.0 by introducing nan expertise to re-enter postulation from nan shoulder. In plain English, this intends that cars and trucks tin now extremity temporarily connected nan broadside of nan roadworthy erstwhile basal and past rejoin moving traffic. In addition, Beta 5.0 tin now recreation farther to debar obstacles for illustration building zones and impermanent roadblocks. I judge these updates are highly important connected 2 fronts.

First, it tells america that AUR is innovating and nan merchandise is becoming much applicable successful existent world situations. Second, it provides america pinch insights connected nan underlying process, which is adjuvant successful position of modeling and assessing if nan commercialization timeline makes sense. By 1Q23's end, AUR hopes that its strategy will beryllium Feature Complete, pinch features for illustration nan expertise to observe and respond to scenarios that are beyond nan system's capabilities and nan expertise to place engagement successful a collision and return due action. Importantly, nan AUR Driver level is still projected to beryllium complete by nan extremity of 2023, pinch a commercialized merchandise anticipated by nan extremity of 2024. Separately, AUR declared that nan Dallas–Houston corridor would service arsenic nan inaugural commercialized route.

Also, AUR reported that it has exceeded its first-quarter extremity of hauling 30 loads per week by averaging 40 loads per week. AUR has completed aviator projects pinch its freight clients, delivering 1,150 loads complete a region of much than 324,000 miles (cumulatively). In addition, AUR and Ryder person announced a strategical business to trial retired on-site fleet maintenance. AUR expects to connection its customers little attraction costs and accrued plus readiness acknowledgment to nan statement pinch Ryder, whose technicians will beryllium stationed astatine its Dallas terminal to support its fleet.

When viewed arsenic a whole, I spot signs that gradually constituent to AUR's commercialization goals being met. The banal communicative should besides move for nan amended pinch news of successful characteristic rollouts and soul KPI achievements.

Risks update

Timeline extension

Since nan motorboat day is quickly approaching, I consciousness compelled to bring this up. Due to nan galore technological and regulatory obstacles that must beryllium flooded earlier its commercialized deployment, its expected day of merchandise is murky astatine best. Investors could return a large deed if AUR is incapable to bring its solution to marketplace arsenic planned.

Conclusion

AUR continues to show beardown advancement towards achieving its commercialization goals. The 4Q22 results and method updates during nan 4th bespeak that AUR is sticking to its roadmap and making notable advancements successful its autonomous driving technology. While nan commercialized motorboat timeline whitethorn still beryllium taxable to extension, nan risk/reward ratio for investors appears to beryllium highly asymmetrical, pinch nan imaginable for a sizable reward if AUR achieves its FY27 targets.

This article was written by

Normad Capital floor plan picture

Both a full-time investor and a full-time operations manager. I've learned astir investing complete nan years by reference and researching businesses that, successful my opinion, person a important competitory advantage that tin sustainably nutrient returns supra its costs of capital.

Disclosure: I/we person nary stock, action aliases akin derivative position successful immoderate of nan companies mentioned, and nary plans to initiate immoderate specified positions wrong nan adjacent 72 hours. I wrote this article myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary business narration pinch immoderate institution whose banal is mentioned successful this article.

Editor: Naga



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