Ambarella’s Upcoming Q4 Earnings Preview

On January 8, 2025, Lee Chan W, the Chief Operating Officer of Ambarella (NASDAQ:AMBA), sold 1,000 shares of the company's Ordinary Shares at $73.48 each. After this transaction, Lee Chan W still holds 114,918 shares. Ambarella is known for its advanced semiconductor products, particularly in video processing and computer vision. The company competes with firms like NVIDIA and Intel in the semiconductor industry.

Ambarella recently announced the expansion of its N1 Edge GenAI Family with a new System on Chip (SoC). This SoC is designed for on-premise multi-channel Video Learning Model (VLM) and Neural Network (NN) processing, operating efficiently under 20 watts. This development was unveiled at the CES event, showcasing Ambarella's commitment to innovation in AI and video processing technologies.

The stock for AMBA is currently priced at $76.20, marking an increase of 2.53% or $1.88. During the trading day, the stock fluctuated between a low of $73.36 and a high of $76.64. This price movement reflects investor interest, possibly influenced by the recent product announcement and the insider transaction by Lee Chan W.

Over the past year, AMBA's stock has experienced a high of $81.32 and a low of $39.69. This range indicates significant volatility, which is common in the tech sector. The company's market capitalization is approximately $3.18 billion, highlighting its substantial presence in the semiconductor market.

The trading volume for AMBA on the NASDAQ exchange is 901,568 shares. This level of activity suggests a healthy interest in the stock, possibly driven by the company's recent technological advancements and strategic moves by its executives.

Ambarella, Inc. (NASDAQ:AMBA) is a company that focuses on developing edge AI semiconductors. These semiconductors are crucial for processing data at the source, reducing the need for data to be sent to centralized servers. This technology is increasingly important in various applications, including security cameras, automotive systems, and other smart devices. Ambarella competes with other semiconductor companies in the AI space, striving to innovate and capture market share.

On November 26, 2024, Ambarella reported an earnings per share (EPS) of -$0.59, falling short of the estimated EPS of $0.03. Despite this, the company exceeded revenue expectations, reporting $82.65 million compared to the estimated $69.08 million. This revenue figure aligns closely with the $82.7 million reported for the third quarter of fiscal year 2025, which ended on October 31, 2024. This represents a significant 63% increase from the $50.6 million in the same period of fiscal 2024.

Over the nine months ending October 31, 2024, Ambarella's revenue reached $200.9 million, reflecting a 15% rise from $174.9 million in the previous year. The company's gross margin under GAAP for the third quarter was 60.6%, slightly up from 59.3% in the prior year. For the nine-month period, the GAAP gross margin was 60.7%, compared to 60.6% in the same timeframe of the previous year. These figures indicate a stable and slightly improving profitability at the gross margin level.

Despite positive revenue and margin figures, Ambarella reported a GAAP net loss of $24.1 million for the third quarter, equating to a loss of $0.58 per diluted ordinary share. This is an improvement from the $41.7 million net loss in the same quarter of the previous year. The company's financial ratios provide further insight into its financial health. With a price-to-sales ratio of approximately 11.18 and an enterprise value to sales ratio of about 10.70, the market values Ambarella's sales highly, though its cash flow is relatively low compared to its enterprise value, as indicated by a high enterprise value to operating cash flow ratio of 480.52.

Ambarella maintains a low debt-to-equity ratio of 0.01, reflecting minimal reliance on debt financing, and a strong current ratio of 2.84, suggesting a solid ability to cover short-term liabilities with short-term assets. However, the company has a negative price-to-earnings ratio of -17.86 and an earnings yield of -5.60%, indicating it is currently not profitable. These metrics highlight the challenges Ambarella faces in achieving profitability despite its revenue growth and strong market position.

Ambarella (NASDAQ:AMBA) recently showcased its financial resilience by reporting a quarterly loss of $0.13 per share, which was better than what analysts expected. This performance is an improvement from the loss of $0.15 per share a year ago, as highlighted by Zacks Investment Research. Ambarella operates in the semiconductor industry, focusing on the development of low-power, high-definition (HD) and Ultra HD video compression, image processing, and computer vision processors. These technologies are crucial for a wide range of products, including security cameras, automotive cameras, and drones. Despite the challenges in the semiconductor industry, such as supply chain disruptions and fluctuating demand, Ambarella's ability to surpass revenue estimates demonstrates its potential for growth and resilience in a competitive market.

The financial metrics of Ambarella reveal a complex picture of its current financial health and market valuation. With a price-to-earnings (P/E) ratio of approximately -13.71, it's clear that the company is trading at a loss relative to its earnings over the last twelve months. This negative P/E ratio suggests that investors are expecting future growth or improvement in the company's earnings. The price-to-sales (P/S) ratio of about 10.86 indicates that investors are willing to pay $10.86 for every dollar of sales, showing a belief in the company's growth potential despite its current losses.

Ambarella's enterprise value to sales (EV/Sales) ratio of approximately 10.19 further underscores the market's valuation of the company relative to its sales. This ratio, along with the price-to-sales ratio, suggests that the market has high expectations for Ambarella's future sales growth. However, the enterprise value to operating cash flow (EV/OCF) ratio of around -125.13 highlights the company's challenges in generating positive cash flow from its operations, which is a critical aspect for sustaining growth and covering expenses.

The company's financial stability is also reflected in its very low debt-to-equity (D/E) ratio of about 0.007, indicating minimal reliance on debt for financing its operations. This low level of debt contributes to the company's financial flexibility and resilience. Additionally, the current ratio of approximately 3.06 demonstrates Ambarella's strong liquidity position, showing that it has more than enough resources to cover its short-term obligations. This liquidity is crucial for the company to navigate through uncertain market conditions and continue investing in research and development to drive future growth.

Ambarella (NASDAQ:AMBA) reported its Q3 earnings, with a loss of $0.28 per share, which was less than the anticipated $0.39 loss per share forecasted by analysts. The company's revenue for the quarter was $50.6 million, slightly above the Street estimate of $50.01 million. Despite this positive outcome, it's important to note that the revenue represents a 39% decrease from the same period in the previous year.

However, Ambarella highlighted a positive development: their customers are making headway in reducing their inventory, which leads the company to anticipate a return to revenue growth in fiscal 2025. CEO Fermi Wang expressed commitment to the company's strategic R&D focus, particularly in the development of System on Chips (SoCs) and software aimed at more advanced AI inference tasks.

For the upcoming fourth quarter, Ambarella projects revenue to be in the range of $50 to $53 million, compared to the Street estimate of $50.35 million.

Ambarella (NASDAQ:AMBA) shares experienced a pre-market drop exceeding 20% today following the release of its Q2 financial results.

Despite Q2 earnings per share (EPS) of ($0.15) and revenue amounting to $62.1 million, which exceeded predicted consensus figures of ($0.21) and $62.02 million, respectively, the provided Q3 guidance fell short of expectations.

For the upcoming Q3/24, Ambarella anticipates revenue of around $50 million, with a variance of 4% in either direction, contrasting with the projected consensus of $67.6 million.

Ambarella (NASDAQ:AMBA) shares experienced a pre-market drop exceeding 20% today following the release of its Q2 financial results.

Despite Q2 earnings per share (EPS) of ($0.15) and revenue amounting to $62.1 million, which exceeded predicted consensus figures of ($0.21) and $62.02 million, respectively, the provided Q3 guidance fell short of expectations.

For the upcoming Q3/24, Ambarella anticipates revenue of around $50 million, with a variance of 4% in either direction, contrasting with the projected consensus of $67.6 million.

Ambarella (NASDAQ:AMBA) shares plunged more than 17% intra-day today after the company reported its Q1 earnings results, with a loss per share of $0.15, better than the Street estimate of a loss per share of $0.20. Revenue came in at $62.1 million, compared to the Street estimate of $61.99 million. As guided, Q1 sales declined 27% quarter-over-quarter and 31% year-over-year, as customers continue to reduce inventory in IoT as well as automotive segments.

Despite the beat, management anticipates Q2/24 revenue to be in the range of $60-$64 million, worse than the Street estimate of $67.17 million. The gross margin is seen at 62.5%-64.5%.