Ambarella (AMBA) Stock: Climbing On Earnings

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Ambarella AMBA Stock News

Ambarella Inc (NASDAQ: AMBA) is having a great start to the trading session this morning, and for good reason. The company reported its financial results for the fiscal-fourth quarter, blowing away expectations. Of course, the news excited investors, sending the stock on a run for the top. Today, we’ll talk about:

  • The earnings report;
  • what we’re seeing from AMBA stock as a result; and
  • what we’ll be watching for ahead.

AMBA Announces Strong Earnings

As mentioned above, Ambarella is having an incredibly strong start to the trading session after reporting its financial results for the fourth quarter. Here’s what we saw from the report:

  • Earnings – In terms of earnings AMBA did overwhelmingly well. During the quarter, the company generated a net loss of $9 million, or $0.28 per share. However, when adjusted for stock-based compensation and other items, earnings came in at $0.21 per share. Analysts were expecting that earnings would come in at $0.09 per share.
  • Revenue – Revenue also proved to be a strong point on the report. During the quarter, analysts expected that the company would generate revenue of $57.1 million. However, the company reported revenue slightly ahead of expectations at $57.3 million.
  • Guidance – Finally, the comapny said that it is expecting for sales to come in around $51 million in the first quarter. That figure is below analyst expectations of $55.6 million.

In a statement, Fermi Wang, President and CEO at AMBA, had the following to offer:

The short term revenue outlook continues to be under pressure as our business shifts away from consumer electronic applications and faces geopolitical and macroeconomic challenges, as we have previously discussed… We are, however, very encouraged with our strategy and position at the forefront of the nascent computer vision market. Less than 1 year after sampling our first computer vision device we continue to achieve major product and market development milestones. In the third fiscal quarter we realized our first computer vision design wins in the automotive market and in the current quarter we expect our first mass production computer vision revenue from the professional surveillance camera market.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Ambarella, the news proved to be overwhelmingly positive. After all, investors only get financial data once every three months. With the report beating expectations, it only makes sense that investors are excited and the stock is headed up. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:40), AMBA is trading at $38.50 per share after a gain of $4.75 per share or 14.07% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the iWatch Markets team will continue to keep a close eye on AMBA. In particular, we’re interested in following the story surrounding the company’s continued work to make it back to growth. It’s important to remember that while the earnings report beat expectations, it showed some incredible declines on a year over year basis. So, it will be nice to see the company reverse this trend. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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