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Investing.com - Stifel has reiterated its Buy rating on Ambarella (NASDAQ:AMBA) stock, maintaining an $80.00 price target. The stock, currently trading at $70.48, has shown strong momentum with a 22.5% return over the past year. According to InvestingPro data, 11 analysts have recently revised their earnings estimates upward for the upcoming period.
The research firm’s analysis is based on an 8.2x CY26E EV/Sales multiple for the semiconductor company, which specializes in video processing and computer vision technologies.
Stifel identified several risk factors that could impact its target price, including potential delays in the timeline for computer vision (CV) product revenue ramp and competition from established competitors with larger intellectual property portfolios.
Additional risks noted by the firm include Ambarella’s highly concentrated customer base, which could cause significant revenue shortfalls or market share losses, and potential excess inventory in the Chinese security camera market.
The firm also highlighted concerns about restrictions on shipments to Chinese customers and the possibility of losing market share to internal suppliers as factors that could affect the company’s performance.
In other recent news, Ambarella reported strong first-quarter fiscal year 2026 results, with revenue reaching $86 million and non-GAAP earnings per share at $0.07, both surpassing consensus estimates. The company provided optimistic guidance for the second quarter, forecasting revenue of $90 million, which indicates a significant year-over-year growth. Ambarella has updated its full-year 2026 growth outlook to a range of 19-25%, reflecting confidence in its edge AI technology, particularly in the Internet of Things (IoT) sector. Additionally, the company is reportedly exploring strategic options, including a potential sale, as indicated by a Bloomberg report. This development has attracted attention from potential buyers, including chip rivals and private equity firms. Analysts have varied in their assessments, with Stifel maintaining a Buy rating and an $80 price target, while KeyBanc and Oppenheimer opted to keep their Sector Weight and Perform ratings, respectively. KeyBanc expressed optimism about Ambarella’s strategic focus on edge AI infrastructure but remains cautious about the time required for full transition. Oppenheimer also cited valuation concerns and macroeconomic uncertainties as reasons for maintaining a neutral stance. These developments highlight Ambarella’s strategic moves and the market’s response to its evolving business landscape.
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