Ambarella (NASDAQ:AMBA) Issues Quarterly Earnings Results, Hits Estimates

Ambarella (NASDAQ:AMBA) posted its quarterly earnings data on Thursday. The semiconductor company reported $0.11 EPS for the quarter, meeting the consensus estimate of $0.11, FiscalAI reports. Ambarella had a negative return on equity of 11.02% and a negative net margin of 17.18%.The firm had revenue of $100.36 million during the quarter, compared to the consensus estimate of $100.12 million. During the same period in the prior year, the company earned $0.07 EPS. The firm’s revenue 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 Trading Down 21.4%

Shares of NASDAQ:AMBA opened at $72.18 on Friday. The business has a 50-day moving average price of $65.86 and a 200 day moving average price of $68.45. The company has a market capitalization of $3.17 billion, a price-to-earnings ratio of -44.83 and a beta of 2.17. Ambarella has a 12-month low of $48.30 and a 12-month high of $96.69.

Ambarella News Roundup

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Q1 revenue rose 16.9% year over year to $100.4 million and EPS matched expectations, showing solid execution. Ambarella (AMBA) Meets Q1 Earnings Estimates
• Positive Sentiment: The Hanwha edge-AI partnership could bring over $800 million in potential revenue over time, strengthening Ambarella’s long-term growth case. Hanwha and Ambarella Enter Into Long-Term Edge AI Agreement
• Positive Sentiment: Analysts such as Needham and Bank of America raised price targets, signaling continued optimism about Ambarella’s edge-AI and automotive opportunity. Quinn Bolton Reiterates Buy on Ambarella, Sets $100 DCF-Based Price Target on Strengthening Auto, Robotics, and Long-Term Deal Momentum
• Neutral Sentiment: Management announced a $50 million buyback, but investors seem focused more on the near-term outlook than capital return. Ambarella, Inc. Announces First Quarter Fiscal Year 2027 Financial Results
• Negative Sentiment: Second-quarter revenue guidance came in cautious, and supply-chain cost pressures raised concerns about demand and margins later in the year. Ambarella Stock Slides After Lackluster Q1 Results
• Negative Sentiment: Summit Insights downgraded Ambarella to Hold, which reinforced the post-earnings selloff. Summit Insights downgrade on Ambarella

Insiders Place Their Bets

In related news, insider Chan W. Lee sold 3,641 shares of the firm’s stock in a transaction dated Thursday, March 19th. The stock was sold at an average price of $54.14, for a total transaction of $197,123.74. Following the completion of the sale, the insider directly owned 160,049 shares of the company’s stock, valued at approximately $8,665,052.86. This trade represents a 2.22% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CEO Feng-Ming Wang sold 32,500 shares of the firm’s stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $91.01, for a total value of $2,957,825.00. Following the sale, the chief executive officer directly owned 806,061 shares of the company’s stock, valued at $73,359,611.61. The trade was a 3.88% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 136,799 shares of company stock valued at $8,917,902 over the last 90 days. Company insiders own 4.50% of the company’s stock.

Institutional Trading of Ambarella

Hedge funds and other institutional investors have recently modified their holdings of the business. Price T Rowe Associates Inc. MD grew its position in Ambarella by 2,312.6% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 864,610 shares of the semiconductor company’s stock valued at $61,250,000 after acquiring an additional 828,773 shares in the last quarter. UBS Group AG grew its position in Ambarella by 379.3% in the 3rd quarter. UBS Group AG now owns 821,747 shares of the semiconductor company’s stock valued at $67,811,000 after acquiring an additional 650,306 shares in the last quarter. Squarepoint Ops LLC acquired a new position in Ambarella in the 2nd quarter valued at about $36,810,000. Balyasny Asset Management L.P. grew its position in Ambarella by 894.7% in the 2nd quarter. Balyasny Asset Management L.P. now owns 459,562 shares of the semiconductor company’s stock valued at $30,361,000 after acquiring an additional 413,362 shares in the last quarter. Finally, The Manufacturers Life Insurance Company grew its position in Ambarella by 24.4% in the 4th quarter. The Manufacturers Life Insurance Company now owns 1,061,145 shares of the semiconductor company’s stock valued at $75,172,000 after acquiring an additional 207,930 shares in the last quarter. 82.09% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of analysts have issued reports on AMBA shares. Rosenblatt Securities reaffirmed a “buy” rating and issued a $115.00 target price on shares of Ambarella in a research note on Tuesday. Susquehanna raised their target price on Ambarella from $80.00 to $110.00 and gave the stock a “positive” rating in a research note on Friday. Consumer Edge reaffirmed a “buy” rating on shares of Ambarella in a research note on Friday, May 22nd. Summit Insights downgraded Ambarella from a “buy” rating to a “hold” rating in a research note on Friday. Finally, Bank of America raised their target price on Ambarella from $72.00 to $96.00 and gave the stock a “neutral” rating in a research note on Friday. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, five have issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $99.75.

Ambarella Company Profile

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.