Canaccord Genuity analyst Matthew Ramsay came out with a research note on Ambarella Inc. (NASDAQ:AMBA), maintaining a Buy rating, while raising the price target to $86 (from $81), which implies an upside of 14% from current levels. The increased price target comes after the company’s key customer GoPro Inc (NASDAQ:GPRO) reported a very strong GoPro JuneQ guidance.

Ramsay wrote, “We maintain our belief Ambarella’s portfolio of highly differentiated application-specific video encode, compression, and analytics processors positions the company for strong sales and earnings growth as HD and UltraHD video capture and compression become increasingly important across several growing consumer and enterprise markets. Further, we believe Ambarella’s investments in video analytics will prove significantly undervalued and provide sustained long-term differentiation and pricing stability. Finally, with ramping sales to large customers in core markets and more material contributions from emerging growth sectors, we believe significant upside to Street estimates is not only possible, but likely.”

Moreover, “GoPro reported strong Q1/15 results with over 50% of sales Hero4 cameras featuring Ambarella A9 processors. In addition, GoPro provided JuneQ guidance for sales of $380-400M (+59% Y/Y) or well above Street estimates of $334M and above our 48% Y/Y GoPro sales growth assumed in our Ambarella estimates, especially important considering we anticipate higher blended ASPs Y/Y to GoPro for Ambarella given the strong A9 mix. We believe GoPro’s strong JuneQ guidance could lead to upside to Ambarella’s AprilQ results when paired with ramping sales to new customer Xiaomi.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Ramsay has a total average return of 7.2% and a 70.0% success rate. Ramsay has a 17.4% average return when recommending AMBA, and is ranked #901 out of 3584 analysts.