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Ambarella (AMBA) Down 11.6% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have lost about 11.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ambarella Q4 Loss Narrower Than Expected
Ambarella reported a narrower-than-expected loss for the fourth quarter of fiscal 2024. The company reported a non-GAAP loss of 24 cents per share for the quarter, narrower than the Zacks Consensus Estimate of a loss of 33 cents.
However, the bottom line compared unfavorably with the year-ago quarter’s non-GAAP earnings of 23 cents per share. The dismal year-over-year performance was mainly due to a decline in revenues.
Fourth-quarter revenues plunged 38% year over year to $51.6 million, mainly due to weakness in its Internet of Things (IoT) end market. The top line missed the consensus mark of $51.7 million.
Customer & Market Details
Ambarella had two logistics and Original Design Manufacturers customers that contributed more than 10% in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia accounted for 55% of the company’s fourth-quarter revenues. Chicony, which serves multiple IoT customers, represented 14% of AMBA’s fourth-quarter revenues.
The traction in AMBA’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. Ambarella expects the CV2 family to be the key driver of the company’s revenue growth in fiscal 2025.
Operating Details
The non-GAAP gross margin was 62.5%, down 100 basis points year over year in the fiscal fourth quarter.
On a non-GAAP basis, operating expenses were $44.2 million, down from $46 million in the year-ago quarter. Non-GAAP operating expenses were also lower than the company’s prior guidance of $45-$48 million, primarily due to its expense management actions and the timing of spending between quarters.
Balance Sheet
As of Jan 31, 2023, Ambarella had cash and cash equivalents & marketable securities of $219.9 million compared with $222.3 million as of Oct 31, 2023.
Q1 2025 Guidance
The company expects stability in near-time revenues based on recent customer feedback and continued momentum in bookings. The company forecasts its first-quarter fiscal 2025 revenues in the range of $52-$56 million, with sequential growth in IoT and automotive end market.
For the first quarter, the non-GAAP gross margin is anticipated in the band of 61.5-63%. Non-GAAP operating expenses are projected in the range of $46-$49 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Ambarella has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ambarella has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Ambarella (AMBA) Down 11.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have lost about 11.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ambarella due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ambarella Q4 Loss Narrower Than Expected
Ambarella reported a narrower-than-expected loss for the fourth quarter of fiscal 2024. The company reported a non-GAAP loss of 24 cents per share for the quarter, narrower than the Zacks Consensus Estimate of a loss of 33 cents.
However, the bottom line compared unfavorably with the year-ago quarter’s non-GAAP earnings of 23 cents per share. The dismal year-over-year performance was mainly due to a decline in revenues.
Fourth-quarter revenues plunged 38% year over year to $51.6 million, mainly due to weakness in its Internet of Things (IoT) end market. The top line missed the consensus mark of $51.7 million.
Customer & Market Details
Ambarella had two logistics and Original Design Manufacturers customers that contributed more than 10% in the reported quarter. WT Microelectronics, a partner in Taiwan that serves multiple customers in Asia accounted for 55% of the company’s fourth-quarter revenues. Chicony, which serves multiple IoT customers, represented 14% of AMBA’s fourth-quarter revenues.
The traction in AMBA’s CV flow system-on-a-chip in professional IP cameras continued in the reported quarter. Ambarella expects the CV2 family to be the key driver of the company’s revenue growth in fiscal 2025.
Operating Details
The non-GAAP gross margin was 62.5%, down 100 basis points year over year in the fiscal fourth quarter.
On a non-GAAP basis, operating expenses were $44.2 million, down from $46 million in the year-ago quarter. Non-GAAP operating expenses were also lower than the company’s prior guidance of $45-$48 million, primarily due to its expense management actions and the timing of spending between quarters.
Balance Sheet
As of Jan 31, 2023, Ambarella had cash and cash equivalents & marketable securities of $219.9 million compared with $222.3 million as of Oct 31, 2023.
Q1 2025 Guidance
The company expects stability in near-time revenues based on recent customer feedback and continued momentum in bookings. The company forecasts its first-quarter fiscal 2025 revenues in the range of $52-$56 million, with sequential growth in IoT and automotive end market.
For the first quarter, the non-GAAP gross margin is anticipated in the band of 61.5-63%. Non-GAAP operating expenses are projected in the range of $46-$49 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Ambarella has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ambarella has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.