Are Ambarella Earnings Enough for Investors?

Ambarella, Inc. (NASDAQ: AMBA) reported fiscal fourth quarter financial results after markets closed on Tuesday. The company posted $0.92 in earnings per share (EPS) and $87.5 million in revenue, versus consensus estimates from Thomson Reuters that called for $0.74 in EPS and $86.07 million in revenue. The same period from last year had $0.64 in EPS on $67.97 million in revenue.

In terms of guidance for the fiscal first quarter, the company expects to see revenues in the range of $62.5 million to $64.5 million, with a gross margin in the range of 63% to 64.5%. There are consensus estimates for this period calling for $0.46 in EPS and $69.61 million in revenue.

The board of directors approved a share repurchase plan authorizing the repurchase of up to an aggregate of $75 million of the company’s ordinary shares through June 30, 2017. Keep in mind that the company has a total market cap of $1.95 billion.

On the books, cash, cash equivalents, and marketable securities totaled $405.4 million at the end of the quarter, compared with $307.9 million in the fiscal fourth quarter from last year.

Fermi Wang, President and CEO of Ambarella, commented:

During the year we continued to make progress in diversifying our markets and customer base and enjoyed significant revenue growth from home monitoring and drone markets, as well as building customer momentum in new OEM automotive applications. We entered mass production with our first 14nm SoCs, continued to raise the performance bar with the launch of our 4Kp60 Ultra HD SoCs and introduced our first automotive qualified solutions. Looking forward, we will continue to invest in computer vision technology, automotive solutions, and advanced 10nm process nodes, as we believe these efforts will provide significant additional opportunities for success in the future.

Shares of Ambarella closed Tuesday down 1.4% at $58.95, with a consensus analyst price target of $69.22 and a 52-week trading range of $35.26 to $74.95. Following the release of the report, the stock was initially down 5% at $56.00 in the after-hours trading session.

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