So, why is Pony.ai Inc. (PONY) popping on a Friday? It turns out the autonomous vehicle company is getting a nice one-two punch of positive news, giving investors a reason to be optimistic.
First up, and arguably the bigger deal, is an index promotion. Effective after the close of trading today, Pony.ai will be added to the MSCI China Index. This isn't just any list; it's a leading benchmark that big-money institutional investors use to track the Chinese market. By getting added, Pony.ai becomes the first and only robotaxi company in the club, which should help it attract more of that long-term, stable institutional capital it's looking for to fund its growth.
The second piece of good news is more operational. The company says its robotaxis in Shenzhen had a record-breaking Chinese New Year. During the holiday period, they delivered their highest number of paid orders ever. This is a tangible sign that regular people in China are starting to actually use and pay for autonomous ride-hailing, which is the whole point of the business.
Let's look at where the stock stands technically. As of this writing, shares were trading around $14.70, up about 3.7%. That puts it about 4.4% above its 20-day simple moving average of $13.89, which is a positive short-term signal. However, it's still trading about 8.7% below its 100-day average of $15.89, suggesting the longer-term trend has been weaker. Over the past year, the stock is down about 11%, sitting much closer to its 52-week low of $4.11 than its high of $24.92. The Relative Strength Index (RSI) is at a neutral 48.76, so there's no extreme momentum in either direction just yet.
Looking ahead, the next big date on the calendar is March 24, when the company reports earnings. The expectations are interesting: analysts are forecasting earnings per share of 22 cents. If that happens, it would mark a significant turnaround from a loss of 31 cents per share in the same period last year. On the revenue side, however, the estimate is for $23.93 million, which would be down from $35.52 million a year ago.
The analyst community seems to like the story here. The stock carries a consensus Buy rating with an average price target of $22.36, which is well above the current price. Recent moves by big banks include Barclays initiating coverage with an Equal-Weight rating and a $15 target in mid-December, Macquarie starting with an Outperform rating and a $29 target around the same time, and Citigroup maintaining a Buy rating while lowering its price target to $24.50 back in November.
In short, Pony.ai is getting a boost from both a strategic win (index inclusion) and an on-the-ground win (record holiday rides). For a company in the capital-intensive and future-focused world of self-driving cars, that's a pretty good Friday.
