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Bear Of The Day: Ambarella

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Ambarella (AMBA - Free Report) is the source of the tech behind the GoPro (GPRO) and super high definition cameras.  That said, the company hasn't done that great of job of late in communicating with Wall Street.  The most recent quarter was a nice beat, but guidance was below expectations and that sent estimates lower.  When estimates fall, the Zacks Rank slides and today AMBA is the Bear Of THe Day.

Recent Earnings

AMBA reported Earnings of $0.13 on June 5 after the close.  That was $0.04 better than the Wall Street Estimate.  Revenues were down 11% from the previous year, but slightly ahead of the consensus estimate at $56.9M.

The company guided next quarter revenue to $60-$64M but that was well below the $68.18M consensus estimate and the stock suffered as a result.

Downgrades

Following the release, Oppenheimer downgraded the stock to perform from outperform noting that the company has less room for error going forward.

Several other brokers lowered price targets, with Deutsche Bank moving their number to $44 from $51.  Stifel cut their target to $56 from $64 as well.

Estimates

The Zacks Rank doesn't look at price targets or recommendations.  It focuses only on earnings estimate revisions and following the most recent quarter AMBA estimates really moved lower.  

The current quarter saw estimates chopped in half (well a penny more than a half) as they tumbled from $0.28 to $0.13. 

The current fiscal years moved from $1.43 to $0.78 and the next fiscal year moved from $2.02 to $1.34.

When estimates move lower like this, investors tend to sell the stock.

Chart

Ambarella, Inc. Price and Consensus

Ambarella, Inc. Price and Consensus | Ambarella, Inc. Quote

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