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Shares of Mobileye N.V. (MBLY), the Israeli company that makes chips for automobiles that analyze road conditions, are up $1.82, or 4.8%, at $40, after underwriters of its August 1st initial public offering started coverage this morning, with seven of the nine offering the equivalent of a Buy rating, the other two starting at Hold.

Mobileye, based in Jerusalem, makes a so-called "EyeQ" semiconductor that is tuned to analyze road conditions, as part of the "Advanced Driver Assistance Systems" increasingly being built into many automobiles.

Goldman Sachs, one of the lead underwriters, initiated at Neutral. The firm has declined to provide a copy of its initiation report.

But the other major name on the name plate, Morgan Stanley, started the stock at Overweight, with analyst Ravi Shankar writing that the stock is "the only pure play on two of the fastest growing and most powerful trends in the auto industry today — autonomous cars and software."

Shankar is ecstatic about Mobileye's role in the self-driving car:

MBLY's proprietary vision algorithm allows the car to see and interpret its surrounding environment, making it a key enabler for cars that will soon drive themselves. MBLY's importance in facilitating a trend that will fundamentally transform the auto industry cannot be overstated [...] We see 50% of new cars sold globally having some form of ADAS/autonomous system by 2022, rising to 70% by 2028 vs. 2% today. In the next 5 years, value creation at MBLY will be driven by Advanced Driver Assistance Systems (ADAS) penetration resulting from "virtual" mandates like Euro NCAP and IIHS safety standards.

He likes the company's "moats" around its business, with "an estimated 80% share of the vision market today because of their early lead and superior approach."

Shankar models the company making $131 million in revenue this year and 18 cents EPS. For next year, he sees $211 million and 39 cents EPS.

Citigroup's Itay Michaeli starts the stock at Buy with a $48 price target, writing that "Mobileye is at the center of arguably the most powerful automotive megatrend in history—active safety (ADAS) and autonomous mobility."

"This isn't just another regulatory driven penetration story, but also arguably the auto industry's "IPhone" moment."

He likes the increasing complexity of the company's parts:

The story of Mobileye is one of technological disruption vs. traditional forward-facing ADAS sensors like radars, LIDAR and stereo cameras. Mobileye's self-designed EyeQ system-on-chip with innovative machine-vision software made it possible for lower-cost/weight monocular cameras to perform ADAS functions better and cheaper than competing sensors. As a result, Mobileye's share >80%. Recent wins in the next-gen tri-focal sensor (autonomous drive) suggests a similar head start. We expect mono & tri-focal to be dominant sensors.

R.W. Baird's David Leiker, however, starts the stock with a Neutral rating, writing that "We believe the growth opportunity and profitability are very attractive; however, we are concerned with valuation and what seem to be overly aggressive expectations."

Leiker thinks most of the prospects for the company are already priced into the stock:

Mobileye's $38 stock price represents a market capitalization in excess of $8 billion. For a company expected to generate $130 million in revenue and $40-45 million in net income during 2014, Mobileye carries a market valuation that is well above automotive peers, reflecting not only the attractive financial profile but also the growth opportunity from rising penetration that we estimate could drive 60% EPS growth over the next 5-10 years. Because of Mobileye's unique growth and return profile, we have looked at several scenarios to value the company. Ultimately, we believe the best point of reference for valuation is Gentex Corporation (GNTX), which in the early 1990s also received a high valuation based on unique business model and growth opportunity. Likewise, current-day SaaS models (with high growth and returns) receive a similar valuation to what Gentex received in the early stages of its adoption story. On this basis, we are using a 45x P/E multiple on our 2018 EPS estimates, with market capitalization discounted by 20% to arrive at a 12-month price target of $42; a 10% discount rate would push the target price above $50.

Leiker has the company making $130.73 million in revenue this year and 18 cents EPS, and then $218 million in revenue and 39 cents EPS.