🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Ambarella gains on earnings beat, revenue growth not expected until fiscal 2025

Published 01/12/2023, 15:44
© Reuters.
AMBA
-

Ambarella (NASDAQ:AMBA) shares are trading higher in early Friday trading after the company's latest quarterly earnings beat consensus expectations.

The company reported a third-quarter loss of $0.28 per share, $0.11 better than the analyst estimate of a $0.39 loss per share. Revenue for the quarter came in at $50.6 million versus the consensus estimate of $50.01 million. Despite the beat, revenue declined by 39% compared to the same period last year.

However, AMBA noted that customers "appear to be making progress with their inventory reduction efforts," and they expect to return to revenue growth in fiscal 2025.

“We remain determined and focused on our strategic R&D priorities for the introduction of a portfolio of SoCs and software targeting more sophisticated AI inference workloads," said CEO Fermi Wang.

Looking ahead, the company sees Q4 revenue between $50 and $53 million, versus the consensus of $50.35 million.

At the time of writing, AMBA shares are up 5%, above the $61 per share mark.

Following the earnings release, BofA analysts reiterated an Underperform rating and $58 per share price target on the stock.

They told investors in a note that the company is nearing the end of the cycle, but visibility and growth concerns remain.

"Reiterate Underperform and maintain PO at $58 on unch. 8x CY24E EV/S following modest Q3 and Q4 beat (1%/2% above estimates) on inventory correction nearly complete yet continued IoT weakness," the analysts said.

"Management states markets appear to be improving, although IoT-related weakness weighs on growth as customers work down last of excess inventory. Autos market also seeing weak spots with some customer order pushouts and project rescheduling on weaker demand (guided flat QoQ in JanQ vs IoT up ~3%)," they added.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.