Ambarella (NASDAQ:AMBA) Issues Quarterly Earnings Results

Ambarella (NASDAQ:AMBA) posted its quarterly earnings data on Thursday. The semiconductor company reported $0.11 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.11, FiscalAI reports. Ambarella had a negative net margin of 19.42% and a negative return on equity of 12.16%. The firm had revenue of $100.36 million for the quarter, compared to the consensus estimate of $100.12 million. During the same quarter in the prior year, the company posted $0.07 earnings per share. The company’s revenue for the quarter was up 16.9% compared to the same quarter last year.

Here are the key takeaways from Ambarella’s conference call:

• Revenue and profitability beat guidance in Q1, with revenue of $100.4 million, non-GAAP gross margin of 59.9%, and non-GAAP EPS of $0.11, while Q2 revenue guidance calls for $105 million to $111 million.
• Management said edge AI demand remains strong and highlighted a new phase of growth driven by long-term customer agreements that should improve revenue visibility and create more predictable recurring business.
• The company announced a major Hanwha long-term agreement that could exceed $800 million over more than 10 years, covering co-development and sourcing across multiple end markets including physical security, robotics, and industrial applications.
• Automotive set a quarterly revenue record, and management expects automotive growth to outpace the broader market, helped by commercial fleet telematics and safety applications.
• The company built up inventory and cash usage increased to support new product ramps and protect against supply-chain tightness, with cash and marketable securities falling to $277.8 million and inventory days rising to 145.

Ambarella Price Performance

Shares of Ambarella stock opened at $91.84 on Friday. The stock has a market capitalization of $4.03 billion, a price-to-earnings ratio of -51.60 and a beta of 2.17. The business has a 50-day moving average of $65.50 and a 200 day moving average of $68.42. Ambarella has a 12 month low of $48.30 and a 12 month high of $96.69.

Insider Buying and Selling at Ambarella

In other news, CFO John Alexander Young sold 4,577 shares of the company’s stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $52.77, for a total transaction of $241,528.29. Following the completion of the transaction, the chief financial officer directly owned 117,072 shares of the company’s stock, valued at approximately $6,177,889.44. This represents a 3.76% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Chan W. Lee sold 6,729 shares of the business’s stock in a transaction that occurred on Tuesday, March 17th. The stock was sold at an average price of $52.77, for a total transaction of $355,089.33. Following the sale, the insider owned 156,370 shares of the company’s stock, valued at $8,251,644.90. This represents a 4.13% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 136,799 shares of company stock worth $8,917,902. 4.50% of the stock is currently owned by corporate insiders.

Institutional Trading of Ambarella

Institutional investors and hedge funds have recently bought and sold shares of the business. Pacer Advisors Inc. raised its stake in Ambarella by 82.2% during the 4th quarter. Pacer Advisors Inc. now owns 4,231 shares of the semiconductor company’s stock valued at $300,000 after acquiring an additional 1,909 shares during the last quarter. Vident Advisory LLC boosted its stake in shares of Ambarella by 7.2% in the fourth quarter. Vident Advisory LLC now owns 5,265 shares of the semiconductor company’s stock valued at $373,000 after buying an additional 353 shares in the last quarter. Mackenzie Financial Corp lifted its holdings in Ambarella by 28.4% in the fourth quarter. Mackenzie Financial Corp now owns 19,483 shares of the semiconductor company’s stock valued at $1,357,000 after acquiring an additional 4,314 shares during the period. Empowered Funds LLC purchased a new position in shares of Ambarella in the 4th quarter valued at about $92,000. Finally, Sona Asset Management US LLC purchased a new stake in Ambarella during the fourth quarter worth about $992,000. Hedge funds and other institutional investors own 82.09% of the company’s stock.

Ambarella News Summary

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Ambarella reported fiscal Q1 revenue of $100.4 million, up 16.9% year over year, with EPS of $0.11 matching estimates and revenue slightly topping expectations, suggesting execution remains on track. Ambarella (AMBA) Meets Q1 Earnings Estimates
• Positive Sentiment: The company also guided Q2 revenue to $105 million-$111 million, which was above the consensus view at the midpoint, helping support the stock’s move. Ambarella outlines $105M-$111M Q2 revenue while Hanwha agreement targets $800M+ over 10+ years
• Positive Sentiment: Ambarella announced a long-term edge-AI agreement with Hanwha that could generate more than $800 million in potential revenue over 10+ years, a meaningful validation of its platform and future demand outlook. Hanwha and Ambarella Enter Into Long-Term Edge AI Agreement
• Positive Sentiment: Analysts turned more constructive after the report, with Needham’s Quinn Bolton reiterating Buy and raising his target to $100, while Bank of America’s Vivek Arya lifted his target to $96, both pointing to longer-dated edge-AI upside. Quinn Bolton Reiterates Buy on Ambarella, Sets $100 DCF-Based Price Target on Strengthening Auto, Robotics, and Long-Term Deal Momentum
• Neutral Sentiment: Ambarella’s CEO and CFO disclosed pre-arranged stock sales under 10b5-1 plans, which investors may view as routine rather than a major signal. MarketBeat AMBA insider transactions

Analysts Set New Price Targets

AMBA has been the topic of several research analyst reports. Stifel Nicolaus set a $90.00 price target on Ambarella in a research note on Friday, May 22nd. Rosenblatt Securities reiterated a “buy” rating and issued a $115.00 price objective on shares of Ambarella in a research note on Tuesday. Finally, Consumer Edge reissued a “buy” rating on shares of Ambarella in a report on Friday, May 22nd. Two analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, four have issued a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus target price of $94.75.

About Ambarella

Ambarella, Inc is a global semiconductor company headquartered in Santa Clara, California, specializing in video compression, image processing and computer vision technologies. The company designs low-power, high-definition system-on-chip (SoC) solutions that enable the capture, processing and streaming of video in a variety of embedded applications. Ambarella’s platforms combine advanced video encoding, multi-core central processing units and hardware accelerators to deliver high-resolution imaging with low power consumption.

Ambarella’s product portfolio caters to multiple markets, including security and surveillance, automotive vision, wearable cameras, drones and robotics.