Ambarella, Inc. (NASDAQ:AMBA) is a Santa Clara, California-based leading developer of low-power, high-definition video compression and image processing solutions. According to the company’s website, Ambarella’s products are used in a variety of high-definition cameras including security IP cameras, sports cameras, wearable cameras, and automotive video camera recorders. The company is most notably the supplier for GoPro. Ambarella released its second quarter results on September 4th and its results were more than impressive.
During its Q2 results, Ambarella reported $0.37 Non-GAAP earnings per share, beating analysts’ consensus estimate of $0.28 by $0.09. During the same quarter last year, the company posted $0.26 earnings per share. Ambarella had a profit of $47.00 million for the quarter, compared to analysts’ consensus estimate of $44.7 million. The company’s revenue for the quarter was up 24.7% on a year-over-year basis. On average, analysts expect that Ambarella will post $1.49 EPS for the current fiscal year.
Ambarella beat its own guidance of $43.5 million to $45.5 million posted last quarter. This is partly due to the increase in IP security cameras, driven by growth in both professional IP security cameras and in-home security cameras. Fermi Wang, president and CEO of Ambarella said in the report, “We are delighted with our second quarter financial results….We achieved revenue of $47.0 million reflecting the success of our HD and Ultra-HD camera solutions in the expanding IP security camera, UAV and wearable sports camera markets.”
Shares of Ambarella opened at $38.50 on Friday, September 5th. The company has a 1-year high of $39.16 and a 1-year low of $16.70. The stock’s daily moving average is $37.79 and has a 50-day moving average of $30.77. The market cap for Ambarella is $1.09 billion and its P/E ratio is 43.31.
On September 5th, Topeka Capital analyst Sujeeva De Silva maintained a Buy rating for Ambarella and raised his price target from $33 to $43. He noted, “AMBA reported FY2Q15 (Jul.) revenue ahead of consensus and guided for a much stronger than expected seasonal consumer ramp. EPS upside resulted from a mix-driven margin boost as newer UltraHD resolution products begin to ramp. AMBA guided for significant growth in FY3Q15 (Oct.), reflecting both a robust consumer holiday build coupled with broadening adoption of video processors across multiple growing markets.” De Silva has a +24.1% average return on all stocks he has rated, a 73% success rate making recommendations, and is ranked #56 out of 3289 analysts on TipRanks.
Also on September 5th, Morgan Stanley analyst Joseph Moore reiterated an Equal Weight rating for Ambarella. He reasoned, “Despite strong results, risk reward is balanced at these levels, in our view. A very strong consumer camera build in the October qtr across GoPro (sports), Dropcam (home security), and auto dashboard cameras drives October numbers much higher. But with the stock surge coming into the qtr, our sense is that much of this is priced in, and the company highlighted a potential decline in January after these strong builds. At 23X 2015 estimates for a consumer-centric company with high customer concentration, we’d wait for a better entry point.” Moore has a +9.9% average return on all stocks he has rated and a 55% success rate making recommendations.
On average, the top analyst consensus for AMBA is Moderate Buy.