UBS Initiates Coverage on Next Vision with 434 Shekel Target Price
Swiss investment bank UBS initiated coverage of Israeli drone camera maker Next Vision with a Buy rating and a 434-shekel target price, signaling a 99% upside potential.
Swiss investment bank UBS has initiated coverage of Israeli tech firm Next Vision with a "Buy" rating and a target price of 434 shekels per share, representing an upside of approximately 99% over the market price. In the bank's optimistic scenario, the target price reaches 682 shekels per share, reflecting an upside of more than 200%. The coverage is particularly notable due to the rare decision by a major international investment bank to initiate coverage on a mid-cap Israeli company.
Strong Demand for Drone Technologies
UBS estimates that Next Vision, which develops stabilized cameras for drones and micro-UAVs, is set to continue benefiting from soaring global demand for tactical unmanned aerial vehicles. This growth is expected regardless of which specific platform manufacturers win various defense tenders. The bank forecasts that the company will surpass its own internal revenue projections, anticipating 407 million dollars in revenue by 2026, compared to the company's internal target of roughly 355 million dollars.
Looking further ahead, UBS projects an average annual growth rate of approximately 55%, culminating in revenues exceeding 1.5 billion dollars by 2030. This expansion will be supported by a significant scaling of manufacturing capacity, with monthly production rates projected to surge from about 1,500 units at the beginning of the year to more than 5,000 units per month by its end.
Market Recovery and Insider Sell-Offs
In response to the favorable analyst report, Next Vision's stock climbed by roughly 4%, completing a recovery of over 15% from its late August lows, when it dropped below the 200-shekel threshold. Despite this rebound, the stock remains about 47% lower than its peak earlier in the year.
The sharp correction followed a cooling of market sentiment toward defense-related equities and investor concerns regarding future growth trajectories and profitability margins. Simultaneously, heavy share sales by company insiders and founders weighed heavily on the stock. In June alone, company founders and senior executives offloaded shares worth approximately 200 million dollars, bringing total insider divestments to roughly 1.1 billion shekels.
"Next Vision represents a unique growth profile in the tactical UAV sector, combining proven technological superiority with surging global demand that easily justifies our optimistic valuation model," noted analysts at UBS.
Exceptional Multi-Year Performance
Next Vision completed its initial public offering on the Tel Aviv Stock Exchange in June 2021 at a valuation of approximately 407 million shekels. Since then, the stock has surged by more than 4,000%, fueled by rapid operational expansion and soaring international demand. At its peak earlier this year, the company approached a market capitalization of nearly 40 billion shekels.
Despite the recent correction from its record highs, Next Vision continues to trade at a price-to-earnings multiple of roughly 43. While relatively high compared to industry peers, this valuation reflects aggressive investor expectations for sustained long-term growth. Local analysts maintain an equally optimistic outlook, with recent target prices significantly outpacing current market valuations.
