What Look for in Ambarella Earnings

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Ambarella Inc. (NASDAQ: AMBA) is set to report its most recent financial results after the markets close on Thursday. This company is largely tied to GoPro Inc. (NASDAQ: GPRO) as one of its key suppliers, and these earnings seem to move in tandem. Last month, GoPro reported a net loss but solid guidance for the full year. Considering GoPro’s earnings were mixed, it might be a tough call to say where Ambarella is going, but investors were fairly positive at the time for GoPro.

Thomson Reuters has consensus estimates of $0.38 in earnings per share (EPS) on $64.28 million in revenue for Ambarella. In the fiscal second-quarter of last year, it posted EPS of $0.88 and $84.19 million in revenue.

The proliferation of smart devices and ubiquitous access to broadband connections is driving exponential growth in the capture, transmission, consumption and analytics of video content. Some analysts see Ambarella products as uniquely positioned to enable a new wave of professional and consumer devices to capture and stream high-quality video with real-time analytics.

Ambarella provides the highest-performance video processing systems-on-chips with the lowest power consumption, according to its management. The company’s proprietary video processing architecture and deep domain expertise in video processing and delivery make the company the go-to high-end solution provider in markets such as IP camera, wearable camera, drone camera and automotive dashboard cameras.

Ahead of the earnings report, a few analysts weighed in on Ambarella:

  • Canaccord Genuity reiterated a Buy rating and raised its price target to $85 from $65.
  • KeyCorp has an Overweight rating and raised its price target to $75 from $53.
  • Pacific Crest has an Overweight rating and raised its price target to $75 from $53.
  • Needham reiterated a Hold rating.
  • Stifel reiterated a Buy rating with a $86 price target.
  • Deutsche Bank has a Hold rating.
  • Morgan Stanley has a Buy rating.

Without factoring in Wednesday’s move, Ambarella has outperformed the broad markets, with the stock up nearly 30% year to date. However, over the past 52 weeks the stock is actually down about 25%.

Shares of Ambarella were traded down 4% at $69.29 on Wednesday, with a consensus analyst price target of $67.00 and a 52-week trading range of $33.39 to $83.25.

GoPro shares were last seen down 1.4% at $14.65. The consensus price target is $12.25, and a 52-week range is $8.62 to $41.74.