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Why Is Ambarella (AMBA) Up 12.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have added about 12.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ambarella due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ambarella Q4 Earnings Beat Estimates, Revenues Miss
Ambarella reported fourth-quarter fiscal 2022 non-GAAP earnings of 45 cents per share, which outpaced the Zacks Consensus Estimate by 4.7%. The reported figure soared 221% from the prior-year quarter’s earnings of 14 cents per share.
Revenues surged 45% year over year to $90.2 million but narrowly missed the consensus mark of $90.4 million. The robust year-over-year top-line growth was primarily driven by improvement in the automotive and security camera businesses.
Customer & Market Details
Ambarella had two customers that contributed more than 10% in the reported quarter. WT Microelectronics, a fulfillment partner in Taiwan that serves multiple customers in Asia, accounted for 59% of the company’s revenues. Hakuto, a Japanese distributor for automotive customers, contributed 12%.
Momentum in Ambarella’s CV flow SoCs (system-on-a-chip) in professional IP cameras across all geographies continued in the reported quarter.
Operating Details
Non-GAAP gross margin was 64.8%, up 340 basis points (bps) year over year in the fiscal fourth quarter.
A healthy customer and product mix supported by stable price movements aided gross-margin expansion in the fiscal fourth quarter.
On a non-GAAP basis, operating expenses were $40.3 million, up 13.2% sequentially. Non-GAAP operating expenses were slightly above the mid-point of the company’s prior guidance, mainly driven by increase in organic research & development investments.
Headcount at the end of the fiscal fourth quarter was 899, with about 82% of the employees dedicated to engineering. Roughly 65% of these engineers are from Asia.
Net inventory was $45.2 million as of Jan 31, 2022, down 4% sequentially.
Balance Sheet & Cash Flow
As of Jan 31, 2022, Ambarella had cash and cash equivalents & marketable securities of $171 million compared with $457.8 million as of Oct 31, 2021.
In the fiscal fourth quarter, the company generated an operating cash flow of $20.6 million. During the full-fiscal 2022, Ambarella generated an operating cash flow of $38.8 million.
Full-Year Highlights
For the full-fiscal 2022, Ambarella reported revenues of $331.9 million, indicating a surge of 49% year over year.
The company reported non-GAAP earnings of $1.61 per share, reflecting a whopping 387.9% surge.
Non-GAAP gross margin expanded 200 bps to 63.4%. Non-GAAP operating margin expanded 150 bps to 19%.
Guidance
For first-quarter fiscal 2023, revenues are expected between $88.5 million and $91.5 million. Non-GAAP gross margin is anticipated to be 63-64%.
Non-GAAP operating expenses are projected to be $41-$43 million.
Management noted that supply chain constraints will remain a concern in the first quarter of fiscal 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -104.74% due to these changes.
VGM Scores
At this time, Ambarella has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Ambarella has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Ambarella (AMBA) Up 12.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Ambarella (AMBA - Free Report) . Shares have added about 12.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ambarella due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Ambarella Q4 Earnings Beat Estimates, Revenues Miss
Ambarella reported fourth-quarter fiscal 2022 non-GAAP earnings of 45 cents per share, which outpaced the Zacks Consensus Estimate by 4.7%. The reported figure soared 221% from the prior-year quarter’s earnings of 14 cents per share.
Revenues surged 45% year over year to $90.2 million but narrowly missed the consensus mark of $90.4 million. The robust year-over-year top-line growth was primarily driven by improvement in the automotive and security camera businesses.
Customer & Market Details
Ambarella had two customers that contributed more than 10% in the reported quarter. WT Microelectronics, a fulfillment partner in Taiwan that serves multiple customers in Asia, accounted for 59% of the company’s revenues. Hakuto, a Japanese distributor for automotive customers, contributed 12%.
Momentum in Ambarella’s CV flow SoCs (system-on-a-chip) in professional IP cameras across all geographies continued in the reported quarter.
Operating Details
Non-GAAP gross margin was 64.8%, up 340 basis points (bps) year over year in the fiscal fourth quarter.
A healthy customer and product mix supported by stable price movements aided gross-margin expansion in the fiscal fourth quarter.
On a non-GAAP basis, operating expenses were $40.3 million, up 13.2% sequentially. Non-GAAP operating expenses were slightly above the mid-point of the company’s prior guidance, mainly driven by increase in organic research & development investments.
Headcount at the end of the fiscal fourth quarter was 899, with about 82% of the employees dedicated to engineering. Roughly 65% of these engineers are from Asia.
Net inventory was $45.2 million as of Jan 31, 2022, down 4% sequentially.
Balance Sheet & Cash Flow
As of Jan 31, 2022, Ambarella had cash and cash equivalents & marketable securities of $171 million compared with $457.8 million as of Oct 31, 2021.
In the fiscal fourth quarter, the company generated an operating cash flow of $20.6 million. During the full-fiscal 2022, Ambarella generated an operating cash flow of $38.8 million.
Full-Year Highlights
For the full-fiscal 2022, Ambarella reported revenues of $331.9 million, indicating a surge of 49% year over year.
The company reported non-GAAP earnings of $1.61 per share, reflecting a whopping 387.9% surge.
Non-GAAP gross margin expanded 200 bps to 63.4%. Non-GAAP operating margin expanded 150 bps to 19%.
Guidance
For first-quarter fiscal 2023, revenues are expected between $88.5 million and $91.5 million. Non-GAAP gross margin is anticipated to be 63-64%.
Non-GAAP operating expenses are projected to be $41-$43 million.
Management noted that supply chain constraints will remain a concern in the first quarter of fiscal 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -104.74% due to these changes.
VGM Scores
At this time, Ambarella has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Ambarella has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.