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Ambarella (AMBA)
NASDAQ:AMBA
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Ambarella
(NASDAQ:AMBA)48Neutral
Positive Factors
Earnings
Ambarella reported results above the midpoint and guided well above expectations.
Product Demand
Growing momentum for CV5 and CV7 products drove the upside, contributing to solid sales growth.
Negative Factors
Operating Expenses
Despite high-teens topline growth, elevated operating expenses could limit earnings power over the next several years.
Tariff Uncertainty
Tariff uncertainty may impact customer demand, leading to potential challenges in the second half of the year.
Ambarella (AMBA) vs. S&P 500 (SPY)
Market Cap
$2.23B
Dividend YieldN/A
Average Volume (3M)950.00K
Price to Earnings (P/E)―
Beta (1Y)2.13
Revenue Growth25.78%
EPS Growth32.95%
CountryUS
Employees915
SectorTechnology
Sector Strength48
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)-2.84
Shares Outstanding41,701,954
10 Day Avg. Volume1,686,466
30 Day Avg. Volume950,005
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)8.84
Price to Cash Flow (P/CF)84.30
P/FCF Ratio135.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$95.00Price Target Upside79.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Ambarella Business Overview & Revenue Model
Company DescriptionAmbarella, Inc. is a leading developer of low-power, high-definition (HD) and ultra-HD video compression and image processing solutions. The company's products are used in a variety of human and computer vision applications, including video security, automotive, and wearable cameras. Ambarella's semiconductor solutions enable high-definition video capture, sharing, and display, facilitating advanced driver assistance systems (ADAS) and autonomous vehicle operations.
How the Company Makes MoneyAmbarella generates revenue primarily through the sale of its semiconductor products and solutions to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) across various industries. Its key revenue streams include video security, automotive, and consumer electronics sectors. The company licenses its technology and patents to third parties, contributing to its earnings. Ambarella also partners with leading technology firms to integrate its solutions into broader platforms, enhancing its market reach and revenue potential.
Ambarella Financial Statement Overview
Summary
Ambarella faces substantial financial challenges, notably in profitability and cash flow generation, while maintaining a strong balance sheet with minimal leverage. Income statement and cash flow issues significantly weigh down the performance score.Income Statement
The income statement reveals significant challenges for Ambarella, with negative net income and declining revenue. The TTM data show a gross profit margin of 60.3% and a net profit margin of -62.4%, indicating profitability issues. Revenue growth rate from the previous annual period stands at -25.2%, reflecting a downturn in sales. Negative EBIT and EBITDA margins further highlight operational difficulties.38
Negative
Balance Sheet
The balance sheet is relatively robust with a debt-to-equity ratio of 0.01, suggesting low leverage. The equity ratio is 82.6%, indicating strong shareholders' equity relative to total assets. However, the return on equity is negative due to net losses, which is a potential risk factor.65
Positive
Cash Flow
Cash flow analysis shows a challenging situation with negative free cash flow in the TTM, indicating potential liquidity issues. The free cash flow growth rate is -153.2%, reflecting deteriorating cash generation. The operating cash flow to net income ratio is -0.03, highlighting inefficiencies in converting income into cash.45
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 252.47M | 226.47M | 337.61M | 331.86M | 222.99M | 228.73M | Gross Profit |
| 152.26M | 136.82M | 208.93M | 208.13M | 135.57M | 132.71M | EBIT |
| -141.57M | -154.56M | -74.26M | -29.64M | -61.17M | -49.65M | EBITDA |
| -130.08M | -129.75M | -54.32M | -14.63M | -49.20M | -38.02M | Net Income Common Stockholders |
| -157.50M | -169.42M | -65.39M | -26.41M | -59.79M | -44.79M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 423.64M | 219.93M | 206.86M | 171.04M | 440.71M | 404.75M | Total Assets |
| 549.55M | 657.65M | 710.20M | 657.54M | 573.28M | 527.28M | Total Debt |
| 9.47M | 5.34M | 8.64M | 11.71M | 10.44M | 10.16M | Net Debt |
| -216.04M | -139.57M | -104.91M | -159.33M | -230.84M | -221.25M | Total Liabilities |
| 86.90M | 97.78M | 104.11M | 110.37M | 98.30M | 79.20M | Stockholders Equity |
| 462.65M | 559.87M | 606.09M | 547.18M | 474.98M | 448.07M |
| Cash Flow | Free Cash Flow | ||||
| -3.75M | 7.05M | 29.04M | 29.12M | 25.86M | 37.59M | Operating Cash Flow |
| 4.37M | 19.02M | 44.09M | 38.80M | 30.80M | 39.41M | Investing Cash Flow |
| -27.27M | 7.84M | -107.30M | -119.55M | -31.32M | -8.58M | Financing Cash Flow |
| 6.23M | 4.51M | 5.70M | 10.53M | 10.40M | 6.52M |
Ambarella Technical Analysis
Negative
53.07
Price Trends
73.93
Negative
68.80
Negative
61.28
Negative
Market Momentum
-5.85
Positive
25.69
Positive
5.44
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBA, the sentiment is Negative. The current price of 53.07 is below the 20-day moving average (MA) of 70.17, below the 50-day MA of 73.93, and below the 200-day MA of 61.28, indicating a bearish trend. The MACD of -5.85 indicates Positive momentum. The RSI at 25.69 is Positive, neither overbought nor oversold. The STOCH value of 5.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMBA.
Ambarella Risk Analysis
Ambarella disclosed 72 risk factors in its most recent earnings report. Ambarella reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ambarella Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $28.57B | 16.31 | 68.78% | 0.84% | 21.20% | 311.29% | |
75 Outperform | $2.75T | 38.35 | 119.18% | 0.03% | 114.20% | 146.26% | |
74 Outperform | $112.02B | 72.03 | 4.43% | 1.63% | -19.28% | -44.00% | |
72 Outperform | $8.40B | 144.36 | 8.71% | ― | -30.90% | -76.39% | |
67 Neutral | $19.13B | 12.50 | 18.97% | ― | -14.19% | -27.42% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
48 Neutral | $2.23B | ― | -20.89% | ― | 25.78% | 32.95% |
* Technology Sector Average
Performance Comparison
AMBA
Ambarella
53.07
-2.39
-4.31%
ADI
Analog Devices
225.86
30.89
15.84%
LSCC
Lattice Semiconductor
63.78
-16.30
-20.35%
MPWR
Monolithic Power
596.79
-117.47
-16.45%
NVDA
Nvidia
112.69
26.94
31.42%
ON
ON Semiconductor
45.40
-36.20
-44.36%
Ambarella Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -30.00% | Next Earnings Date: Jun 3, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with significant revenue growth in AI, automotive, and IoT segments, alongside a return to profitability and positive cash flow. However, there are challenges in the automotive market and some volatility in the revenue funnel, which have impacted gross margins.Highlights
Record AI Revenue and Growth
Achieved a record level of AI revenue, contributing to a higher blended average selling price. Forecasting fiscal 2025 revenue to increase by 22% to 24% year-over-year.
Strong Performance in Automotive and IoT Segments
Both auto and IoT business revenues increased by about 30% sequentially, driven by new product ramps and higher-priced AI inference processors like CV5.
Non-GAAP Profitability
Returned to non-GAAP profitability in Q3 with a net profit of $4.5 million or $0.11 of earnings per diluted share.
Positive Cash Flow
Generated positive operating cash flow of $6.6 million in the quarter and $8.4 million year-to-date.
Successful Product Launches
Introduced a range of new products including CV72-based cameras, and secured significant customer engagements in both automotive and IoT markets.
Lowlights
Automotive Market Challenges
Despite growth, the automotive market faces significant pressure with slow global vehicle production growth and delays in Level 2+ market penetration.
Volatility in Automotive Revenue Funnel
6-year automotive revenue funnel reduced from $2.4 billion to $2.2 billion due to project revisions, delays, and cancellations.
Gross Margin Pressure
Non-GAAP gross margin came in at the low end of guidance due to product mix and lower-than-planned margins from legacy processors.
Company Guidance
In the Ambarella Q3 Fiscal Year 2025 earnings call, the company provided robust guidance, reflecting a significant upward revision in their revenue forecast. The company's third-quarter revenue was reported at $82.7 million, exceeding the high end of their guidance range, with a 30% sequential increase. This growth was driven by strong performance in both the automotive and IoT segments, particularly due to new product ramps and higher-priced AI processors like the CV5. Looking forward, Ambarella is projecting a fiscal year 2025 revenue increase of 22% to 24% year-over-year, compared to their prior estimate of mid- to high-teens growth. The company also highlighted their automotive revenue funnel, valued at approximately $2.2 billion over the next six years, and their strategic focus on expanding their presence in the Level 2+ and higher autonomy automotive markets. Additionally, Ambarella is advancing its product roadmap with the upcoming introduction of 2-nanometer technology, expected to tape out in Q4 of the following year, aiming to enhance their competitive position in AI-driven edge processing markets.Ambarella Corporate Events
Executive/Board Changes
Ambarella Appoints Chantelle Breithaupt as Independent Director
Positive
Feb 28, 2025
On February 25, 2025, Ambarella, Inc. appointed Chantelle Breithaupt as an independent director and a member of the Audit Committee, effective immediately. Ms. Breithaupt brings extensive financial leadership experience from her roles at Arista Networks, Aspen Technology, Cisco Systems, and GE, which is expected to strengthen Ambarella’s governance and financial oversight.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.