Serve Robotics Inc.-Should You Add SERV Stock to Your Portfolio Pre-Q4 Earnings?

Core Viewpoint - Serve Robotics is expected to report its fourth-quarter 2024 results on March 6, with revenue estimates at $0.27 million and a loss of 19 cents per share remaining unchanged over the past month [1][2]. Financial Performance - In the third quarter of 2024, Serve Robotics generated revenues of$ 0.22 million, with delivery and branding revenues contributing $0.183 million. Delivery revenues increased by 49% sequentially and 108% year-over-year [4]. - The company operated 59 daily active robots, marking a 23% sequential increase and a 97% year-over-year surge, generating an average of 465 daily supply hours, reflecting a 21% quarter-over-quarter rise and a 108% year-over-year increase [5]. Stock Performance - Since its public equity offering on April 18, 2024, Serve Robotics shares have surged by 160.9%, significantly outperforming the broader Zacks Computer and Technology sector's return of 14.6% and the Zacks IT Services industry's appreciation of 10.1% [6]. - The stock is currently trading below the 50-day and 200-day moving averages, indicating a bearish trend [10]. Strategic Partnerships and Market Position - Serve Robotics' long-term prospects are bolstered by growing demand for delivery services on partner platforms such as Uber Eats and 7-Eleven. The company has strategic investors including NVIDIA, Uber, and Delivery Hero [11]. - The expanding partner base includes notable companies like Shake Shack, Ouster, Wing Aviation, and Magna, enhancing its competitive position in the last-mile delivery market [12]. Technological Advancements - Serve Robotics' third-generation robots are designed to carry more goods and reduce delivery costs, with the potential to lower average delivery costs to under$ 1 [13][14]. - The new robots, powered by NVIDIA's Jetson Orin module, offer five times more on-board computing power and can travel approximately twice as far on a single charge [15]. Future Growth Plans - The company plans to deploy 2,000 robots by 2025 through its agreement with Uber, anticipating an annual revenue run rate of $60-$ 80 million once fully deployed [16]. - Serve Robotics aims to deploy 250 robots in Los Angeles by the end of Q1 2025 and is set to enter Dallas by the end of Q2 2025, with potential expansions into San Diego and Vancouver [17][18]. Conclusion - The expanding portfolio of robots and a strong partner base indicate solid long-term growth potential for Serve Robotics, justifying its premium valuation [19].