Ambarella Q1 Earnings Beats Expectations But Guidance Misses


Small cap high-definition video solutions stockAmbarella Inc (NASDAQ: AMBA) reportedfiscal Q1 2018 earnings after Tuesdays market close with shares falling in premarket trading as results beat expectations, but the current quarter’s results are projected to be lower than analysts expected. Revenue rose 12.2% to $64.1 million and GAAP net income was $2.6 million versusGAAP net income of $1.8 million for the same period in fiscal 2017. Total of cash, cash equivalents and marketable securities was $420.2 million at the end of the quarter versus$323.8 million.Ambarella Inc gave the following guidance for the second quarter of fiscal year 2018 (ending July 31, 2017):


Revenue is expected to be between $69.0 million and $72.0 million Gross margin on a non-GAAP basis is expected to be between 62.0% and 63.5% Operating expenses on a non-GAAP basis are expected to be between $26.0 million and $27.5 million

The CEO commented:

“Q1 revenue of $64.1 million reflects our continued push to diversify our markets and customers with strong growth in the quarter coming from IP security cameras, including both professional and home monitoring markets, and continued growth in other cameras markets including wearable and automotive cameras. While our current markets continue to expand, we believe the combination of video with computer vision technology will be the real driver of new opportunities in both our current markets as well as emerging markets such as OEM automotive and robotics. We feel our investment in the development of a family of computer vision SoCs in support of our customers’ advanced video cameras will be the foundation for the future expansion of our business.”


“Q1 revenue of $64.1 million reflects our continued push to diversify our markets and customers with strong growth in the quarter coming from IP security cameras, including both professional and home monitoring markets, and continued growth in other cameras markets including wearable and automotive cameras. While our current markets continue to expand, we believe the combination of video with computer vision technology will be the real driver of new opportunities in both our current markets as well as emerging markets such as OEM automotive and robotics. We feel our investment in the development of a family of computer vision SoCs in support of our customers’ advanced video cameras will be the foundation for the future expansion of our business.”


Ambarella Inc had been in our Elite Opportunity Pro (EOP) newsletter portfolio pick both when thecompany was offering attractive valuation metrics with good forward growth potential and when the stock was attractive as ashort trade:

Ambarella, Inc. (AMBA) has been all over the map over the last few years. It has defied gravity both to the up and to the downside, and although today’s suggested short of the stock is strictly technical, we do believe its current share price has once again gotten a little out of line when you compare it to the rest of the markets’ valuation metrics right now.


Rather than get into the lofty valuation metrics though, we’re simply going to show you what we’re seeing from a technical perspective and let you decide what to do with the idea from there.

A technical chart for Ambarella Inc shows sharesapproaching a key resistance levels once again:

A long term performance chart shows shares of AmbarellaInc peaking in mid 2015before falling offwhile the performance oflarge capNVIDIA Corporation (NASDAQ: NVDA) has caught up and small cap end customerGoPro Inc is still underperforming:


Finally, here is a quick recap of small cap Ambarellas recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

7/30/201610/30/20161/30/20174/29/2017
EPS Est. 0.38 0.94 0.74 0.36
EPS Actual 0.54 1.11 0.92 0.39
Difference 0.16 0.17 0.18 0.03
Surprise % 42.10% 18.10% 24.30% 8.30%
EPS TrendCurrent Qtr. (Jul 2017)Next Qtr. (Oct 2017)Current Year (2018)Next Year (2019)
Current Estimate 0.48 0.74 2.18 2.48
7 Days Ago 0.49 0.74 2.18 2.51
30 Days Ago 0.49 0.75 2.19 2.55
60 Days Ago 0.49 0.75 2.19 2.55
90 Days Ago 0.49 0.75 2.19 2.54