Why Ambarella Shares Are Crumbling
Ambarella shares retreated early Wednesday after it released its fiscal first-quarter financial results late on Tuesday.
When Ambarella Inc. (NASDAQ: AMBA) released its fiscal first-quarter financial results after the markets closed on Tuesday, the company said that it had $0.13 in earnings per share (EPS) and $56.9 million in revenue. Consensus estimates from Thomson Reuters had called for $0.27 in EPS and revenue of $68.15 million. The same period of last year reportedly had EPS of $0.48 and $71.63 million in revenue.
During the latest quarter, gross margin as 61.8%, compared with 64.3% for the same period in fiscal 2018.
Looking ahead to the fiscal second quarter, the company expects to see revenues in the range of $60.0 million to $64.0 million and gross margin of 59% to 61%. The consensus estimates call for $0.59 in EPS and $90.16 million in revenue for the coming quarter.
On the books, Ambarella cash, cash equivalents and marketable securities totaled $414.1 million at the end of the quarter, down from $420.2 million at the end of the same quarter a year ago.
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Fermi Wang, president and CEO, commented:
We continue to successfully achieve our target milestones in the rollout of our new computer vision technology. At our Analyst Day in March, we demonstrated our fully autonomous vehicle, EVA, using our Supercam stereovision cameras running on our CV1 chip. Additionally, we have sampled CV22 chips to major security customers and achieved success with first silicon on our new CV2 chip, both delivering further deep neural network performance improvements based on our CVFlow architecture. We are encouraged by the feedback received by customers in the security and automotive markets and believe that our investment in computer vision technology will bring new opportunities for growth.
Shares of Ambarella closed Tuesday at $49.39, with a consensus analyst price target of $59.38 and a 52-week trading range of $40.06 to $66.23. Following the announcement, the stock was down 12% at $43.60 in early trading indications Wednesday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
