In a research report issued yesterday, Canaccord Genuity analyst Matthew Ramsay maintained a Buy rating on Ambarella Inc (NASDAQ:AMBA), while slightly increasing the price target to $122 (from $120), following GoPro Inc (NASDAQ:GPRO) earnings announcement of 93% Y/Y sports camera sales growth for the June quarter. The new price target represents a potential upside of 5% from where the stock is currently trading.
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 consumer and enterprise markets. In fact, with continued strong growth of core sports and enterprise security cameras and new growth of home security, wearable, automotive, and drone cameras, we believe growth will remain strong through F’17 and upside is likely to our Street-high revenue estimates.”
“Specifically, we are increasing estimates following GoPro announcing 93% Y/Y sports camera sales growth for the June quarter and providing guidance well above the sales levels assumed in our Ambarella estimates. Finally, we believe Ambarella’s investments in video analytics, including the VisLab acquisition for automotive markets, will prove undervalued long term.”, the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Ramsay has a total average return of 8.9% and a 52.3% success rate. Ramsay has an 61.4% average return when recommending AMBA, and is ranked #805 out of 3711 analysts.