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What's in the Offing for Ambarella (AMBA) in Q4 Earnings?

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Ambarella Inc. (AMBA - Free Report) is slated to report fourth-quarter fiscal 2022 results on Feb 28.

For the fourth quarter, Ambarella anticipates revenues between $88.5 million and $91.5 million. The Zacks Consensus Estimate for the same is pegged at $90.5 million, suggesting growth of 45.6% from the year-ago reported figure.

The Zacks Consensus Estimate for earnings stands at 43 cents per share, which indicates a whopping improvement of 207% from the year-ago quarter’s earnings of 14 cents.

For the quarter under review, Ambarella anticipates non-GAAP gross margin of 63-64% approximately. Non-GAAP operating expenses are expected in the range of $39-$41 million.

The Santa Clara, CA-based company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 41.7%.

Let’s see how things have shaped up for AMBA before this announcement.

Ambarella, Inc. Price and EPS Surprise

Factors to Note Ahead of Q4 Earnings

Ambarella’s fiscal fourth-quarter results are anticipated to reflect strong design wins and customer engagement with its AI-enabled video-processing chips in the consumer security camera.

Automotive and Internet of Things cameras might have driven the performance in the quarter to be reported. Although high supply-chain costs may have persisted, a favorable customer and product mix, along with a stable pricing environment, is likely to have aided the gross-margin expansion beyond the high end of the long-term estimate of 59-62%.

The company is benefiting from the solid momentum in CV2, CV22 and CV25. In fiscal 2021, these products generated production revenues from 1,000 customers.

Moreover, during the fiscal third quarter, Ambarella witnessed an increase in the blended average selling price (ASP) on solid demand for CV SoC, which carries a higher ASP compared with non-CV solutions. The trend is likely to have sustained in the fiscal fourth quarter.

However, the tight chip supply from Samsung’s Texas and Austin foundries may have weighed on Ambarella’s sales growth in the quarter under review. Industry-wide component supply-chain constraints are likely to have negatively impacted the company’s capability to meet its customers’ demand in the fourth quarter, which consequently might have hurt overall sales.

What Our Model Says

Our proven model predicts an earnings beat for AMBA this time. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Ambarella currently carries a Zacks Rank of 3 and has an Earnings ESP of +2.86%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Per our model, DICK'S Sporting Goods (DKS - Free Report) , American Eagle Outfitters (AEO - Free Report) and Abercrombie & Fitch (ANF - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

DICK'S Sporting Goods currently carries a Zacks Rank #2 and has an Earnings ESP of +4.86%. The company is slated to report its fourth-quarter fiscal 2022 results on Mar 8. DICK'S Sporting Goods’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 104.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for DICK'S Sporting Goods’ fourth-quarter earnings stands at $3.39 per share, implying a year-over-year increase of 39.5%. DKS is estimated to report revenues of $3.31 billion, which suggests growth of 6% from the year-ago quarter.

American Eagle Outfitters carries a Zacks Rank #3 and has an Earnings ESP of +2.07%. The company is scheduled to report fourth-quarter fiscal 2022 results on Mar 2. American Eagle Outfitters’ earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 12.7%.

The Zacks Consensus Estimate for AEO’s fourth-quarter earnings is pegged at 36 cents per share, indicating a year-over-year decline of 7.7%. The consensus mark for revenues stands at $1.53 billion, suggesting a year-over-year increase of 18.4%.

Abercrombie & Fitch is slated to report fourth-quarter fiscal 2022 results on Mar 2. The company carries a Zacks Rank #3 and has an Earnings ESP of +1.63% at present. Abercrombie & Fitch’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 112.5%.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at $1.33 per share, suggesting a year-over-year decline of 11.3% from the year-ago quarter’s earnings of $1.50. ANF’s quarterly revenues are estimated to increase 5.3% year over year to $1.18 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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