Serve Robotics SERV shares have surged 54.5% year to date, outperforming the Zacks Computer & Technology sector’s appreciation of 1.3% and the Zacks IT Services industry’s return of 2.1%.
Shares of this AI-powered last-mile robot delivery service provider’s long-term prospects ride on growing demand for food and other items on partner platforms that include Uber Eats and 7-Eleven. The company, which was spun off from Uber Technologies in 2021, counts NVIDIA NVDA, Uber, 7-Ventures and Delivery Hero’s corporate venture units as its strategic investors.
Serve Robotics’ expanding partner base, which includes Shake Shack SHAK, Ouster OUST, Wing Aviation and Magna, is noteworthy. SERV’s expanding robotics offering is expected to improve its competitive position in the last-mile delivery space currently dominated by the likes of DoorDash and Amazon. The acquisition of Vebu assets is expected to strengthen SERV’s footprint in the restaurant industry.
In the third quarter of 2024, SERV operated 59 daily active robots, marking a 23% sequential increase and a 97% year-over-year surge. These robots collectively generated an average of 465 daily supply hours, reflecting a 21% quarter-over-quarter rise and a 108% year-over-year upsurge.
SERV Stock’s Performance
Image Source: Zacks Investment Research
Low Cost & Last-Mile Delivery Demand Aids SERV
Serve Robotics believes robots have the potential to reduce the average delivery cost to under $1, lower than the delivery cost by human couriers currently, making on-demand delivery more affordable and accessible in the areas in which it operates.
Serve Robotics’ third-generation robots can carry more goods, enable more deliveries and further reduce the cost of delivery. The latest robots support an expanded cargo bin that holds four large 16-inch pizzas, or 15% more volume than the previous robots.
Powered by NVIDIA’s Jetson Orin module that adds five times more on-board computing power, Ouster’s new REV7 digital lidar, and major upgrades to the robots’ sensor suite helps SERV robots move fast, travel approximately twice as far on a single charge, and spend six more hours in the field each day.
SERV, in collaboration with Magna International, has started mass manufacturing of its third-generation robots.
Serve Robotics is on track to deploy 2,000 robots in 2025 through its agreement with Uber, anticipating an annual revenue run rate of $60-$80 million once the robots are fully deployed and achieve full utilization.
It expects to deploy 250 of these robots around Los Angeles by the end of the first quarter of 2025 and remains on track to enter Dallas, its first new market outside of L.A., by the end of the second quarter of 2025. San Diego and Vancouver are other markets the company is considering to expand into.
SERV’s Earnings Estimates Show Upward Trend
Estimates for SERV’s 2025 have shown improvement as the figure is now expected to be a loss of 61 cents per share, narrower than 64 cents over the past 30 days.
Estimates for Serve Robotics’ first-quarter 2025 loss are currently pegged at 18 cents per share, a couple of cents narrower over the past 30 days.
Serve Robotics Inc. Price and Consensus
Serve Robotics Inc. price-consensus-chart | Serve Robotics Inc. Quote
Strong Liquidity to Boost SERV’s Prospects
SERV’s strong liquidity position is expected to help it execute its long-term strategic plan.
Serve Robotics generated $35.8 million in gross proceeds from the successful public equity offering and $15 million from a private placement. In August, the company closed another $20 million private placement transaction.
As of Sept. 30, 2024, SERV had cash and cash equivalents of $50.9 million.
In December, the company raised $86 million, bringing the total gross proceeds raised in 2024 to $167 million. Since its spinout from Uber in 2021, Serve Robotics secured approximately $220 million in total funding.
In January 2025, SERV raised another $80 million through registered direct offering of common stock.
Here's Why SERV Stock is a Buy
The technical indicator is bullish for SERV, as the shares are trading above the 50-day and 200-day moving averages.
SERV Trades Above 50-Day & 200-Day SMA
Image Source: Zacks Investment Research
SERV stock is trading at a premium currently, as suggested by the Value Score of F.
Nevertheless, SERV’s expanding robotics fleet bodes well for long-term investors.
Serve Robotics currently has a Zacks Rank #2 (Buy), suggesting that it is the right time to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Serve Robotics Inc. (SERV) : Free Stock Analysis Report
Shake Shack, Inc. (SHAK) : Free Stock Analysis Report
Ouster, Inc. (OUST) : Free Stock Analysis Report
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