UBS Initiates Coverage of NextVision with Buy Rating, Sees Huge Potential

Swiss investment bank UBS has begun covering Israeli drone camera manufacturer NextVision, initiating its analysis with a "Buy" recommendation and a price target of NIS 434 per share, representing a potential upside of approximately 99% from the current market price. In an optimistic scenario, UBS projects a target price of NIS 682 per share, indicating an upside of over 200%. The bank's decision to cover an Israeli company is noted as particularly unusual.

UBS analysts forecast that NextVision, which develops stabilized cameras for drones and micro-unmanned aerial vehicles, will benefit from increasing global demand for drones and tactical UAVs, regardless of which platform manufacturers win tenders. The bank anticipates NextVision will surpass its own revenue projections, forecasting $407 million in revenue for 2026 compared to the company's estimate of $355 million. Looking further, UBS projects an average annual growth rate of about 55% until 2030, with revenues expected to exceed $1.5 billion. This growth is expected to be supported by expanded production capacity, with monthly output projected to rise from around 1,500 units at the start of the year to over 5,000 units by year-end.

NextVision's stock has seen a recent surge of approximately 4%, recovering over 15% from its late August low below NIS 200. Despite this rebound, the share price remains about 47% below its earlier peak this year. The significant decline from its high followed a broader market sentiment shift away from defense stocks, investor concerns about future growth rates and profitability, and substantial share sales by company insiders and founders. In June, founders and senior executives sold shares worth approximately $200 million, contributing to total insider sales of about NIS 1.1 billion.

Since its IPO on the Tel Aviv Stock Exchange in June 2021 at a valuation of roughly NIS 407 million, NextVision's stock has surged over 4,000%. This dramatic rise was driven by rapid business expansion and increased product demand, leading to a peak market capitalization near NIS 40 billion earlier this year. Even after the recent drop, the company trades at a price-to-earnings ratio of about 43, considered high for its sector and reflecting investor expectations for continued growth. Local analysts also maintain positive coverage, with their recent price targets significantly exceeding the current market price.