Serve Robotics Inc

Serve Robotics, Inc. (NASDAQ: SERV) is engaged in developing next generation robots for last-mile delivery services. The Company offers an autonomous all-electric robot that makes delivery sustainable and economical. The Company’s fleet consists of over 100 robots. Its autonomous all-electric robot can provide real-time presence and status updates on those platforms and receive requests to perform deliveries with respect to customer orders placed on those platforms as needed.

Recent Business and Financial Updates

• Successful Market Uplisting and Public Offering: Serve Inc. marked a significant milestone by debuting on the OTCQB market on March 7, 2024. Following this, the Company successfully completed an uplisting to the Nasdaq Capital Market, trading under the ticker symbol "SERV" as of April 18, 2024. This transition facilitated a public equity offering that generated gross proceeds of USD 40.0 million, underscoring the Company’s growing investor confidence and market presence.
• Strategic Investments Bolster Financial Strength: Strategic investments played a crucial role in Serve’s financial performance during the first quarter of 2024. The equity offering saw substantial contributions, including USD 4.5 million from Postmates, LLC, a subsidiary of Uber Technologies Inc., and USD 2.5 million from long-term partner NVIDIA. These investments highlight the strong support from key stakeholders and strategic partners, which is essential for the Company's ongoing growth and technological advancements.
• Operational Efficiency and Growth: Operationally, Serve achieved impressive growth metrics in the first quarter of 2024. The Company averaged 300 daily supply hours, reflecting a 97% increase year-over-year and a 15% increase from the previous quarter. Additionally, Serve experienced a 70% increase in daily active robots compared to the first quarter of 2023, and a 15% increase from the fourth quarter of 2023. These figures demonstrate Serve’s operational efficiency and expanding capabilities in automated services.
• Enhanced Collaboration with Magna International: A notable development was Serve's partnership with Magna International Inc., formalized through a Master Services Agreement (MSA). This agreement encompasses a comprehensive statement of work and a licensing deal for Serve’s autonomous technology software, aiming to enhance Magna's product development in robotics and logistics. Further solidifying this collaboration, on April 24, 2024, Magna was designated as the exclusive contract manufacturer of Serve’s delivery robots, expanding the scope of their partnership.
• Robust Financial Performance and Outlook: Financially, Serve reported first-quarter revenue of USD 0.95 million, including USD 0.85 million from its software service agreement with Magna, with an additional USD 0.35 million expected in the second quarter of 2024. The Company's cash and cash equivalents stood at USD 0.43 million as of March 31, 2024, which increased to approximately USD 34.2 million by April 30, 2024, following the public offering. As of March 31, 2024, Serve had 24.6 million shares of common stock outstanding, which rose to 37.1 million by May 13, 2024, and a fully diluted count of 42.2 million shares.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 87.70, upward trending and inside overbought zone, with expectations of a consolidation or a short-term correction before upward continuation. Additionally, the stock's current positioning is above 50-Day SMA, which  can act as a short to medium term support level.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Serve Robotics, Inc. (NASDAQ: SERV) at the closing market price of USD 7.55 as of July 19, 2024.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is July 19, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.