Zacks Investment Research downgraded shares of Ambarella, Inc. (NASDAQ:AMBA) from a hold rating to a sell rating in a research note issued to investors on Thursday.

According to Zacks, “Video compression and image processing semiconductors developer, Ambarella reported better-than-expected Q2 results. We remain encouraged by the company’s efforts toward expanding its reach in other markets, such as IP security, automotive, non-GoPro wearable and drones/flying cameras and simultaneously lower dependency on GoPro. However, the company’s disappointing guidance for the forthcoming quarter as well as downbeat revenue outlook for fiscal 2018 makes us increasingly cautious about its near-term prospect. The soft guidance provided by the company may be due to the number of challenges it has been facing. The company faces three main challenges, the risk of losing its largest customer, GoPro; weakness in the drone market and increasing threat from QUALCOMM, which is acquiring NXP Semiconductors to build its presence in the same space. Notably, the stock has underperformed the industry in the last one year.”

A number of other research firms have also recently issued reports on AMBA. Dougherty & Co cut their target price on shares of Ambarella from $75.00 to $60.00 and set a buy rating for the company in a research note on Friday, September 1st. TheStreet cut shares of Ambarella from a b rating to a c+ rating in a research note on Tuesday, June 6th. Vetr cut shares of Ambarella from a strong-buy rating to a buy rating in a research note on Wednesday, May 31st. Needham & Company LLC reiterated a hold rating on shares of Ambarella in a research note on Friday, June 9th. Finally, BidaskClub cut shares of Ambarella from a buy rating to a hold rating in a research note on Friday, June 16th. One investment analyst has rated the stock with a sell rating, seven have assigned a hold rating and eight have issued a buy rating to the stock. Ambarella presently has an average rating of Hold and a consensus price target of $58.23.

Shares of Ambarella (NASDAQ:AMBA) opened at 43.44 on Thursday. The company has a 50-day moving average price of $50.15 and a 200 day moving average price of $53.72. Ambarella has a 52-week low of $40.06 and a 52-week high of $74.95. The firm has a market capitalization of $1.46 billion, a PE ratio of 25.67 and a beta of 1.60.

Ambarella (NASDAQ:AMBA) last released its quarterly earnings data on Thursday, August 31st. The semiconductor company reported $0.48 earnings per share for the quarter, beating analysts’ consensus estimates of $0.44 by $0.04. The company had revenue of $71.63 million for the quarter, compared to the consensus estimate of $70.79 million. Ambarella had a return on equity of 11.97% and a net margin of 16.45%. The company’s quarterly revenue was up 10.0% on a year-over-year basis. During the same period in the previous year, the business earned $0.54 earnings per share. Analysts expect that Ambarella will post $1.89 EPS for the current fiscal year.

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Ambarella declared that its board has authorized a stock repurchase program on Tuesday, June 6th that authorizes the company to repurchase $50.00 million in shares. This repurchase authorization authorizes the semiconductor company to buy up to 2.5% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company’s board of directors believes its stock is undervalued.

In related news, CEO Feng-Ming Wang sold 11,628 shares of the business’s stock in a transaction that occurred on Friday, June 16th. The shares were sold at an average price of $48.77, for a total value of $567,097.56. Following the completion of the transaction, the chief executive officer now owns 290,691 shares in the company, valued at approximately $14,177,000.07. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, VP Christopher Day sold 1,526 shares of the business’s stock in a transaction that occurred on Friday, June 16th. The stock was sold at an average price of $48.77, for a total transaction of $74,423.02. Following the completion of the transaction, the vice president now owns 22,892 shares of the company’s stock, valued at approximately $1,116,442.84. The disclosure for this sale can be found here. Insiders sold a total of 23,963 shares of company stock valued at $1,168,676 in the last 90 days. 5.80% of the stock is currently owned by corporate insiders.

A number of hedge funds have recently bought and sold shares of the stock. Vanguard Group Inc. raised its position in Ambarella by 2.9% in the 2nd quarter. Vanguard Group Inc. now owns 2,145,609 shares of the semiconductor company’s stock worth $104,169,000 after purchasing an additional 60,770 shares during the last quarter. Van Berkom & Associates Inc. raised its position in shares of Ambarella by 22.7% during the 2nd quarter. Van Berkom & Associates Inc. now owns 1,235,483 shares of the semiconductor company’s stock valued at $59,983,000 after acquiring an additional 228,740 shares during the last quarter. Eagle Asset Management Inc. raised its position in shares of Ambarella by 36.2% during the 2nd quarter. Eagle Asset Management Inc. now owns 1,152,405 shares of the semiconductor company’s stock valued at $55,949,000 after acquiring an additional 306,248 shares during the last quarter. AXA raised its position in shares of Ambarella by 100.6% during the 2nd quarter. AXA now owns 708,106 shares of the semiconductor company’s stock valued at $34,379,000 after acquiring an additional 355,170 shares during the last quarter. Finally, Pinnacle Associates Ltd. raised its position in shares of Ambarella by 44.9% during the 1st quarter. Pinnacle Associates Ltd. now owns 679,192 shares of the semiconductor company’s stock valued at $37,159,000 after acquiring an additional 210,558 shares during the last quarter. Hedge funds and other institutional investors own 56.74% of the company’s stock.

Ambarella Company Profile

Ambarella, Inc offers semiconductor processing solutions for video that enable high-definition (HD), video capture, sharing and display. The Company operates through the development and sale of low-power, high-definition video products segment. Its system-on-a-chip designs incorporate HD video processing, image processing, audio processing and system functions onto a single chip.

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