Core Insights - Serve Robotics (SERV) has made significant progress in reducing robot unit costs, with Gen 3 robots now costing approximately one-third of previous models, due to design simplification, manufacturing efficiency, and supply-chain optimization [1][8] Cost Reduction and Structural Changes - The cost reductions are attributed to a more modular robot architecture, fewer custom assemblies, and improved supplier relationships, alongside the availability of lower-cost sensors like LiDAR [2] - These developments enable Serve Robotics to deploy robots more efficiently as the fleet size increases [2] Financial Performance and Investments - In Q3, Serve Robotics reported total operating expenses of $30.4 million, up from $8.2 million in the same quarter last year, while adjusted EBITDA was negative $24.9 million compared to negative $6.2 million in the prior year [3] - The company is investing in operational expansion, launching in new cities, and integrating acquisitions, which has led to increased near-term costs [3] Efficiency Gains and Future Outlook - Management expects margin improvement to come from higher utilization rather than just hardware cost reductions, with average daily operating hours per robot increasing by 12.5% and delivery volume rising by 66% [4][8] - Future margin expansion is anticipated to follow scale as utilization improves across a larger and more autonomous fleet [5][8] Stock Performance and Valuation - SERV shares have increased by 1.6% over the past three months, contrasting with a 2.7% decline in the industry [6] - The stock is currently trading at a forward 12-month price-to-sales (P/S) multiple of 44.94, significantly higher than the industry average of 15.99 [10] Earnings Projections - The Zacks Consensus Estimate for Serve Robotics' 2026 loss per share has widened, with projections indicating a 15% decline in earnings, while competitors are expected to see growth [12][14]