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Ambarella
(NASDAQ:AMBA)
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Rating:56Neutral
Price Target:
$65.00
▼(-8.17% Downside)
Action:Reiterated
Date:09/06/26
AMBA scores in the mid-range primarily because financials show a credible revenue recovery with strong gross margins, low leverage, and still-positive TTM free cash flow, but the company remains unprofitable and recent cash-flow momentum has weakened. Technically, the stock is in a bearish trend below key moving averages, which meaningfully drags the score despite oversold readings. The earnings call adds support via constructive near-term guidance and product/partner ramp commentary, while valuation offers limited support given the negative P/E and no dividend.
Positive Factors
Strong revenue recovery and gross margins
The sustained revenue recovery, combined with resilient gross margins, indicates improving demand for Ambarella’s products and solid chip economics. If maintained, this combination can support reinvestment in AI platforms, improve operating leverage, and strengthen the company’s ability to compete across expanding edge-computing markets.
Negative Factors
Persistent operating and net losses
Ambarella has not yet converted its improving revenue base into sustainable GAAP profitability. Continued operating losses can limit internally funded investment, increase dependence on cost discipline and product execution, and leave earnings vulnerable if new AI platforms take longer than expected to reach scale.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue recovery and gross margins
The sustained revenue recovery, combined with resilient gross margins, indicates improving demand for Ambarella’s products and solid chip economics. If maintained, this combination can support reinvestment in AI platforms, improve operating leverage, and strengthen the company’s ability to compete across expanding edge-computing markets.
Read all positive factors
Ambarella Key Performance Indicators (KPIs)
Any
Revenue by Geography
Tracks the share of Ambarella’s sales coming from each region, indicating how well the company is penetrating automotive, surveillance, and consumer camera markets around the world. Useful for spotting concentration risk if a few countries dominate revenue and for identifying regions that could drive future growth.
Tracks the share of Ambarella’s sales coming from each region, indicating how well the company is penetrating automotive, surveillance, and consumer camera markets around the world. Useful for spotting concentration risk if a few countries dominate revenue and for identifying regions that could drive future growth.
Data provided by:
The Fly
The FlyAmbarella (AMBA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.76B
Dividend YieldN/A
Average Volume (3M)1.57M
Price to Earnings (P/E)―
Beta (1Y)2.00
Revenue Growth20.04%
EPS Growth38.40%
CountryUS
Employees959
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)-1.29
Shares Outstanding43,868,183
10 Day Avg. Volume1,165,686
30 Day Avg. Volume1,571,312
Financial Highlights & Ratios
PEG Ratio0.96
Price to Book (P/B)4.60
Price to Sales (P/S)7.00
P/FCF Ratio47.15
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$94.00Price Target Upside32.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)0.79
Revenue Forecast (FY)$441.35M
Ambarella Business Overview & Revenue Model
Company Description
Ambarella, Inc. is a global semiconductor company specializing in advanced video processing technology. They develop chips that facilitate high-definition (HD) and ultra-HD (UHD) video compression, sophisticated image manipulation, and cutting-edg...
How the Company Makes Money
Ambarella makes money primarily by selling its semiconductor products (computer-vision and video-processing SoCs, and related software/firmware) to device manufacturers and module makers that integrate these chips into end products such as automot...
Ambarella Earnings Call Summary
Earnings Call Date:Sep 03, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 01, 2026
Earnings Call Sentiment Positive
The call was broadly positive, supported by record edge AI and automotive revenue, double-digit year-over-year growth, a higher five-year serviceable market forecast, new product ramps, design wins, and major channel partnerships. The company also provided favorable Q3 revenue guidance. Offsetting concerns included memory scarcity, rising supply chain costs, uncertainty around Q4 customer demand, below-midpoint gross margin, negative free cash flow, higher inventory days and competition in the AI accelerator market.Positive Updates
Q2 Revenue and Earnings Above Guidance Midpoint
Fiscal Q2 revenue was $108.1 million, slightly above the midpoint of the prior guidance range of $105 million to $111 million, up 7.7% sequentially and 13.2% year-over-year. Non-GAAP net profit was $8.2 million, or $0.18 per diluted share.
Negative Updates
Memory Scarcity and Rising Supply Chain Costs
Memory vendors and supply chains are prioritizing AI data center demand, resulting in rising supply chain costs and scarce memory supply. Ambarella is facing rising supply chain costs and plans to pass those costs to customers.
Read all updates
Q2-2027 Updates
Positive
Negative
Q2 Revenue and Earnings Above Guidance Midpoint
Fiscal Q2 revenue was $108.1 million, slightly above the midpoint of the prior guidance range of $105 million to $111 million, up 7.7% sequentially and 13.2% year-over-year. Non-GAAP net profit was $8.2 million, or $0.18 per diluted share.
Read all positive updates
Company Guidance
For fiscal Q3, Ambarella anticipates revenue in the range of $115 million to $124 million, or $119.5 million at the midpoint, non-GAAP gross margin in the range of 59% to 60%, non-GAAP OpEx in the range of $56.5 million to $59.5 million, net interest and other income of approximately $1.9 million, non-GAAP tax expense of approximately $700,000, and diluted share count of approximately 44.9 million shares; the company expects Q3 growth to be led by Physical AI demand from the IoT market, maintains its long-term gross margin target of 59% to 62%, expects the 2-nanometer CV8 semi-custom SoC to generate first production revenue in fiscal 2028, expects meaningful revenue from the CapGemini and Macnica partnerships in 2 to 3 years, and expects revenue of $0.5 billion with each one of them over the next 7 years.Ambarella Financial Statement Overview
Summary
Income Statement
47
Neutral
Balance Sheet
76
Positive
Cash Flow
64
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 417.80M | 390.70M | 284.87M | 226.47M | 337.61M | 331.86M |
| Gross Profit | 243.52M | 226.47M | 167.63M | 136.82M | 208.93M | 208.13M |
| EBITDA | -35.37M | -48.10M | -91.67M | -123.72M | -51.00M | -14.63M |
| Net Income | -56.32M | -75.86M | -117.13M | -169.42M | -65.39M | -26.41M |
Balance Sheet | ||||||
| Total Assets | 780.21M | 798.60M | 688.97M | 657.65M | 710.20M | 657.54M |
| Cash, Cash Equivalents and Short-Term Investments | 272.33M | 312.57M | 250.26M | 219.93M | 206.86M | 171.04M |
| Total Debt | 12.64M | 13.44M | 5.26M | 5.34M | 8.64M | 11.71M |
| Total Liabilities | 159.89M | 203.81M | 127.56M | 97.78M | 104.11M | 110.37M |
| Stockholders Equity | 620.32M | 594.79M | 561.41M | 559.87M | 606.09M | 547.18M |
Cash Flow | ||||||
| Free Cash Flow | 19.86M | 58.01M | 23.45M | 7.05M | 29.04M | 29.12M |
| Operating Cash Flow | 27.33M | 73.52M | 33.84M | 19.02M | 44.09M | 38.80M |
| Investing Cash Flow | -70.34M | -30.49M | -40.53M | 7.84M | -107.30M | -119.55M |
| Financing Cash Flow | 2.13M | 3.81M | 6.40M | 4.51M | 5.70M | 10.53M |
Ambarella Technical Analysis
Negative
70.78
Price Trends
74.01
Negative
72.78
Negative
69.14
Negative
Market Momentum
-2.95
Positive
32.20
Neutral
16.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBA, the sentiment is Negative. The current price of 70.78 is below the 20-day moving average (MA) of 73.47, below the 50-day MA of 74.01, and above the 200-day MA of 69.14, indicating a bearish trend. The MACD of -2.95 indicates Positive momentum. The RSI at 32.20 is Neutral, neither overbought nor oversold. The STOCH value of 16.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMBA.
Ambarella Risk Analysis
Ambarella disclosed 59 risk factors in its most recent earnings report. Ambarella reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ambarella Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.69B | 7.47 | 32.04% | 0.78% | 69.56% | 260.84% | |
66 Neutral | $6.80B | 182.15 | 5.82% | 1.62% | 7.94% | -72.56% | |
65 Neutral | $7.36B | -186.69 | -3.59% | ― | 21.71% | 63.22% | |
63 Neutral | $2.82B | 110.85 | 3.72% | 1.69% | 1.56% | -23.60% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $2.76B | -48.75 | -9.34% | ― | 20.04% | 38.40% | |
52 Neutral | $3.87B | -7.84 | -38.70% | ― | 11.44% | -940.34% |
* Technology Sector Average
AMBA
Ambarella
62.89
-21.10
-25.12%
CAMT
Camtek
145.72
64.65
79.73%
POWI
Power Integrations
50.45
6.23
14.10%
SLAB
Silicon Laboratories
220.58
85.82
63.68%
SIMO
Silicon Motion
256.21
172.51
206.09%
SYNA
Synaptics
98.99
28.42
40.27%
Ambarella Corporate Events
Executive/Board ChangesShareholder Meetings
Ambarella shareholders affirm directors, auditor and equity plan
Positive
Jul 1, 2026
At its annual meeting held on June 26, 2026, Ambarella shareholders elected three Class II directors—Gregory M. Bryant, D. Jeffrey Richardson and Elizabeth M. Schwarting—to serve until the 2029 annual meeting, with approximately 86% of...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.