Swiss cycling brand BMC and U.K.-based Formula One motor racing team Red Bull Advanced Technologies have released a teaser video promising a “cycling revolution.”
In the video, former professional sprint cyclist Fabian Cancellara rides—fast—on an obscured road racing bicycle and ends by claiming that “if this works it’s going to change everything.”
BMC has been working with Aston Martin Red Bull Advanced Technologies for two years and the teaser video released on October 6 is the first communication about the collaboration since it was announced in 2018.
“After almost two years of intense research and development, Red Bull Advanced Technologies and innovative Swiss bike brand BMC have moved into the prototyping phase of their technology partnership,” said a joint announcement.
Red Bull Advanced Technologies’ Vehicle Science team has been helping BMC technicians with simulations of bike behavior based on data from Computational Fluid Dynamics (CFD) models.
The companies are enlisted Cancellara—an Olympic and World Champion—to validate and evaluate some of the first hardware developments produced by the partnership.
“It’s been fascinating to see what Formula 1 development techniques can bring to the field of bike design,” said Christian Horner, Aston Martin Red Bull Racing Team Principal.
“We have developed some hugely innovative concepts and now it’s time to step up the pace of our collaboration and take those enormously exciting ideas to the next level in pursuit of the next generation of performance cycling.”
David Zurcher, CEO of BMC, agreed: “The ideas we’re working on truly have the capacity to significantly improve the entire experience of performance cycling.”
It’s unlikely the collaboration will see any actual products for some time but, interestingly, the UCI, the world governing body for cycling, has recently admitted it will be loosening some of its restrictive design rules next year.
It is hard to argue with Amazon’s (AMZN) performance in 2020. Even amidst a global pandemic and a struggling economy, all the cards have fallen into place for the e-commerce behemoth. Amazon has seen revenue soar during the viral outbreak and so has its stock. Shares are up by 70% on a year-to-date basis.
However, one analyst thinks the Street has got it all wrong on Amazon. So, is there a bear among the long list of Wall Street Amazon bulls?
On the contrary. Pivotal analyst Michael Levine argues the Street is undervaluing Amazon’s SOTP (sum of the parts). In fact, the analyst calls Amazon “the best mega cap on a multiyear basis” and has just increased his price target to a Street high of $4,500. Levine, therefore, expects shares to add another 43% from current levels. No need to add, but the analyst’s rating stays a Buy. (To watch Levine’s track record, click here)
Levine argues investors are “materially underestimating the earnings power of the business.” The 5-star analyst, however, doesn’t exempt Pivotal from misjudging Amazon’s future earnings potential.
“We and almost every other investor we have spoken to over the years, has been framing the AMZN SOTP valuation wrong,” Levine said. “Amazon advertising is only ~5% of revenues, but is a far greater contributor to overall non-AWS EBIT margins than the street recognizes. Said differently, if advertising was viewed as a stand-along business unit, it would represent well north of 300% of 2020E non-AWS EBIT.”
Levine claims “valuation is often more of an art-form than pure science,” but that after all, what really matters is “what is the underlying earnings potential of the business.”
And here is where after crunching the numbers, Levine arrives at an estimate far above the current consensus. Splitting Amazon’s business