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Why Seeing Machines Bears Were Right Before The Drop

Simply Wall St · 1d ago

Seeing Machines entered its March 2026 half-year update with European DMS mandates on the horizon, then reported H1 2026 revenue of US$22.456 million and a deeper net loss as net margin fell to 98.1%. Investors who held Seeing Machines from the start of the year are down 38.9%, including dividends. If you had been weighing a position back on 1 January 2026, how would you have judged that regulatory promise against weakening profitability?

On Simply Wall St, a Narrative is an investor's thesis written down: the reasoning, plus the numbers it rests on. Run those numbers and you get an estimated Fair Value.

The easy part of this move is behind Seeing Machines. Zero in on 8 high quality undervalued stocks for companies trading below our estimates.

The Argument You Would Have Been Weighing Up On Seeing Machines

The shares cost £0.05 at the start of the period, which meant any view on Seeing Machines had to start with whether that price matched your Narrative.

The bullish case put Fair Value at £0.06, based on European DMS rules steering a steep increase in auto royalties and analysts assuming annual revenue growth of 18.9% plus margins shifting from a loss of 44.2% to a 13.9% profit by 2028.

The bearish view set Fair Value at £0.03, focused on autonomous vehicles and OEMs internalising DMS eroding demand, with assumptions of 16.0% annual revenue growth and profit margins only reaching 7.9% in 3 years.

AIM:SEE Trailing 12-Month Earnings & Revenue History as at Oct 2026
AIM:SEE Trailing 12-Month Earnings & Revenue History as at Oct 2026

What The Results Changed For Seeing Machines

The clearest new fact for Seeing Machines was the March 2026 half year update, which showed total revenue of US$22.892 million versus US$25.307 million a year earlier and a deeper net loss of US$22.456 million. Net margin moved from 72.1% in H1 2025 to 98.1% in H1 2026, so the profitability leg of the bullish case stayed unproven. Overall, the evidence supported the cautious case.

The lesson is simple. When a story leans on future margin improvement, treat net margin as the key checkpoint and compare that figure each period to the original profit assumptions before updating your own view.

What Seeing Machines' Current Price Already Assumes

Seeing Machines now trades at £0.04, leaving investors who held from the start of the year with a loss of 38.9% from the earlier £0.05 level.

The selected Narrative places Fair Value above that price. It hinges on regulatory-driven DMS adoption and partnerships translating into stronger royalties. A buyer today would need to believe those adoption and partnership assumptions prove broadly accurate.

"Growing and imminent regulatory mandates in Europe (GSR 2026) will require 100% of all new cars sold to include camera-based driver monitoring systems, leading to a significant and predictable increase in demand for Seeing Machines'' core technology, supporting higher royalty revenues and stronger cash flow."

One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all

Where Could You Get There Earlier?

This company's disappointment is already part of the story. Your next idea could come from looking where the price and the possibilities still seem far apart. Here are three companies priced below our estimates.

  • Company 1 - 19% below our estimate - targets everyday supplement use as gyms and wellness habits become routine.
  • Company 2 - 24% below our estimate - attracts senior lawyers leaving traditional partnerships for tech enabled, higher share fee models.
  • Company 3 - 27% below our estimate - scales a single tech platform that handles rising investment flows for advisers and individuals.

Those are three of them. See the full list of 9 financially solid companies →

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.