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Ambarella (AMBA) Stock Up on Q4 Earnings and Revenue Beat
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Shares of Ambarella, Inc. (AMBA - Free Report) soared nearly 8% during yesterday’s extended trading session, after the company reported better-than-expected fourth-quarter fiscal 2020 results. The company’s quarterly earnings of 14 cents per share beat the Zacks Consensus Estimate by 16.7%.
Notably, quarterly earnings remained flat, year over year, as benefits from stellar revenues were offset by elevated costs and expenses, as well as higher number of shares outstanding.
The company’s quarterly revenues of $57.2 million came in line with the consensus mark. The top line increased 12% year over year. Its transition to a video AI company is a tailwind. Softness in the automotive and security camera market slightly hurt Ambarella’s overall revenue growth in the quarter.
Ambarella’s CV portfolio is also attracting customers, helping it expand the client base. During the quarter, the company shipped pre-production parts and development systems to more than 100 customers.
On a non-GAAP basis, the company reported gross margin of 58.7%, which was 60-basis points above the year-ago quarter’s figure, primarily owing to favorable mix. The fiscal fourth-quarter non-GAAP gross margin also came in higher than management’s guided range of 56.5-58.5%.
Sequentially, non-GAAP operating expenses came in at $30.5 million compared with the previous quarter’s $29.3 million.
Balance Sheet & Cash Flow
Ambarella ended fiscal 2020 with cash and cash equivalents & marketable securities of $231.4 million, up from the $194 million recorded at the end of fiscal 2019.
The company generated operating cash flow of $4.1 million during the fiscal fourth quarter and $39.4 million for fiscal 2020.
Outlook
For first-quarter fiscal 2021, revenues are expected between $52 million and $57 million. Non-GAAP gross margin is anticipated within 57.5-59.5%. Non-GAAP operating expenses are projected at $33-$35 million.
The company is concerned about the coronavirus impact on its China and non-China supply chains. So far in the ongoing quarter, Ambarella has witnessed some order push as well as cancellations due to coronavirus-led business disruptions.
Zacks Rank & Key Picks
Ambarella currently carries a Zacks Rank #3 (Hold).
The long-term earnings growth rate for Atlassian, NVIDIA and Akamai is 22.3%, 12.7% and 12%, respectively.
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Ambarella (AMBA) Stock Up on Q4 Earnings and Revenue Beat
Shares of Ambarella, Inc. (AMBA - Free Report) soared nearly 8% during yesterday’s extended trading session, after the company reported better-than-expected fourth-quarter fiscal 2020 results. The company’s quarterly earnings of 14 cents per share beat the Zacks Consensus Estimate by 16.7%.
Notably, quarterly earnings remained flat, year over year, as benefits from stellar revenues were offset by elevated costs and expenses, as well as higher number of shares outstanding.
The company’s quarterly revenues of $57.2 million came in line with the consensus mark. The top line increased 12% year over year. Its transition to a video AI company is a tailwind. Softness in the automotive and security camera market slightly hurt Ambarella’s overall revenue growth in the quarter.
Ambarella’s CV portfolio is also attracting customers, helping it expand the client base. During the quarter, the company shipped pre-production parts and development systems to more than 100 customers.
Ambarella, Inc. Price, Consensus and EPS Surprise
Ambarella, Inc. price-consensus-eps-surprise-chart | Ambarella, Inc. Quote
Operating Metrics
On a non-GAAP basis, the company reported gross margin of 58.7%, which was 60-basis points above the year-ago quarter’s figure, primarily owing to favorable mix. The fiscal fourth-quarter non-GAAP gross margin also came in higher than management’s guided range of 56.5-58.5%.
Sequentially, non-GAAP operating expenses came in at $30.5 million compared with the previous quarter’s $29.3 million.
Balance Sheet & Cash Flow
Ambarella ended fiscal 2020 with cash and cash equivalents & marketable securities of $231.4 million, up from the $194 million recorded at the end of fiscal 2019.
The company generated operating cash flow of $4.1 million during the fiscal fourth quarter and $39.4 million for fiscal 2020.
Outlook
For first-quarter fiscal 2021, revenues are expected between $52 million and $57 million. Non-GAAP gross margin is anticipated within 57.5-59.5%. Non-GAAP operating expenses are projected at $33-$35 million.
The company is concerned about the coronavirus impact on its China and non-China supply chains. So far in the ongoing quarter, Ambarella has witnessed some order push as well as cancellations due to coronavirus-led business disruptions.
Zacks Rank & Key Picks
Ambarella currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Atlassian Corporation PLC (TEAM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Akamai Technologies, Inc. (AKAM - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Atlassian, NVIDIA and Akamai is 22.3%, 12.7% and 12%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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