AMBA

Ambarella Inc (NASDAQ:AMBA) reported fiscal third quarter results above consensus estimates on revenue, gross margin, and non-GAAP EPS. The beat was driven by seasonal ramp of sports wearable cameras at lead customer GoPro. In the quarter, professional/consumer security cameras and automotive also supported healthy growth. However, while results were positive, management guided Q4’F17 lower than anticipated citing limited sales visibility and potentially high chip inventory levels with certain consumer-focused customers and impacts from ongoing Sony sensor shortages, with inventory levels worrying management entering F’18.

In the wake of the earnings announcement, Ambarella shares are falling 8% to $56.50 in pre-market trading Friday.

“We are very proud to have achieved more than $100 million in revenue in the quarter, a new milestone,” said Fermi Wang, CEO of Ambarella. “We saw continued revenue growth in IP security, home monitoring and the automotive camera markets, as well as a ramp in revenue from action sports cameras for the holiday season. We were also pleased to enable the introduction of a new generation of products, offering 4Kp60 video performance for the first time,” he said.

On the ratings front, Ambarella has been the subject of a number of recent research reports. In a report released today, Oppenheimer analyst Andrew Uerkwitz reiterated a Hold rating on AMBA. Additionally, Needham’s Quinn Bolton reiterated a Hold rating on the stock today.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Andrew Uerkwitz and Quinn Bolton have a yearly average return of 4.9% and 17.2% respectively. Uerkwitz has a success rate of 49% and is ranked #633 out of 4239 analysts, while Bolton has a success rate of 66% and is ranked #33.

Sentiment on the Street is mostly bullish on AMBA stock. Out of 7 analysts who cover the stock, 4 suggest a Buy rating and 3 recommend to Hold the stock. The 12-month average price target assigned to the stock is $80.25, which implies an upside of 31% from current levels.

Ambarella, Inc. is a developer of semiconductor processing solutions for video that enable high-definition video capture, sharing and display. The company combines its processor design capabilities with its expertise in video and image processing, algorithms and software to provide a technology platform that is designed to be scalable across multiple applications and enable rapid and efficient product development. Its system-on-a-chip, or SoC, designs fully integrate high-definition video processing, image sensor processing, audio processing and system functions onto a single chip, delivering exceptional video and image quality, differentiated functionality and low power consumption. The company’s technology is also used in television broadcasting with a significant amount of TV programming worldwide being transmitted using Ambarella compression chips. Its Ambarella SoCs are well-suited to drive the latest generation of high-definition security IP cameras.