Ambarella (AMBA) Stock | Produces Solid Earnings


Ambarella, Inc. (NASDAQ: AMBA)

Today is a great day for Ambarella stockholders following yesterday’s after hours earnings report release. Not only did the company beat earnings per share estimates, it also blew top-line revenue estimates away. So today, we’ll talk about what we saw from Ambarella’s earnings release, what we’re seeing in the market today as a result, and what we can expect to see from the stock moving forward. So, let’s get right to it…

Ambarella Earnings Report

As mentioned above, Ambarella released their earnings report yesterday after the bell; providing financial data for the first quarter of fiscal year 2016. The data released was outstanding. The company produced earnings per share in the amount of $0.71; beating analyst expectations by $0.12 per share. AMBA also reported that top line revenue for the quarter came in at $71.01 million; $3.65 million above analyst expectations. All in all, the report that was released was overwhelmingly positive. Not to mention key information like a growing market space came into play. Here’s a brief snippet from what Firmi Wang, AMBA’s President and CEO had to say about the performance of the company and growing market space…

In addition to continued growth from our existing wearable, IP security and automotive video recorder camera markets, we see increased activity across a wide range of home monitoring cameras; including models by US service providers, as well as from quadcopters or flying cameras…We look forward to continued success as we enable the next generation of intelligent HD and Ultra HD cameras.”

That Statement Tells Us What To Expect From AMBA Long Term

Ambarella is an innovator with regard to wearable and smart HD cameras; and that innovation isn’t likely to come to an end any time soon. In this short message, there are a few indications…

  • Home Monitoring – Home monitoring camera demand is growing; and it’s likely to continue moving in that direction. This larger market should lead to larger profits down the road.

  • Drone Cameras – Also known as quadcopter cameras, drone cameras are all the rage these days. Based on their performance in the quarter, AMBA noticed an increasing demand there as well.

  • More Products To Come – Finally, innovation at Ambarella isn’t likely to come to an end. The company is bringing to life the “next generation of intelligent HD and Ultra HD cameras”. Knowing that the home monitoring and quadcopter space is growing, we are likely to see AMBA focus heavily on these two areas.

As a result of their innovation and key targeting to specific areas that have growing markets, I think that we’ll be seeing more and more positive earnings reports as well as long term gains from Ambarella.

What About The Short Term?

If you’re a day trader, you can expect to see more gains as well. The reality is that everyone loves a good profit, and when a company produces higher than expected profits, we tend to see gains in their stock price. With that said, keep an eye out for dips as they will most likely prove to be great buying opportunities.

What Do You Think?

Where do you think ABMA is headed and why? Let us know in the comments below!