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1. Company Snapshot

1.a. Company Description

Ambarella, Inc.develops semiconductor solutions for video that enable high-definition (HD) and ultra HD compression, image processing, and deep neural network processing worldwide.The company's system-on-a-chip designs integrated HD video processing, image processing, artificial intelligence computer vision algorithms, audio processing, and system functions onto a single chip for delivering video and image quality, differentiated functionality, and low power consumption.


Its solutions are used in automotive cameras, such as automotive video recorders, electronic mirrors, front advanced driver assistance system camera, cabin monitoring system and driver monitoring system camera, and central domain controllers for autonomous vehicle; and professional and home internet protocol security camera; robotics and industrial application, including identification/authentication cameras, robotic products, and sensing cameras, as well as cameras for the home, public spaces, and consumer leisure comprising wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing, and virtual reality applications.The company sells its solutions to original design manufacturers and original equipment manufacturers through its direct sales force and distributors.Ambarella, Inc.


was incorporated in 2004 and is headquartered in Santa Clara, California.

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1.b. Last Insights on AMBA

Ambarella's recent performance was driven by strong Q1 earnings, with EPS beating estimates and revenues surging 58% year-over-year on record Edge AI sales. The company's quarterly earnings of $0.07 per share exceeded the Zacks Consensus Estimate of $0.04 per share. Ambarella's Edge AI semiconductor business is gaining traction, with growing demand for its solutions. The company will hold its second-quarter fiscal year 2026 earnings conference call on August 28, 2025. According to some analysts, Ambarella is considered a buy, with near-unanimous ratings (Source: various analysts).

1.c. Company Highlights

2. Ambarella's FY2026 Earnings: A Strong Performance with Growth Ahead

Ambarella reported a strong fiscal year 2026 with revenue increasing 37% year-over-year to $390.7 million, driven by growth in both automotive and IoT segments. The company's non-GAAP gross margin was 60.7%, and non-GAAP operating expense increased 12.9% for the year. For the fourth quarter, revenue was $100.9 million, slightly above the midpoint of the prior guidance range, with a non-GAAP net profit of $5.5 million, or $0.13 per diluted share, beating estimates of $0.1.

Publication Date: Mar -04

📋 Highlights
  • Revenue Growth:: FY2026 revenue rose 37% YoY to $390.7M, with HAI revenue up 50% YoY.
  • New Product Momentum:: CV75/CV72 AI SoCs reached high single-digit % of total Q4 revenue; CV7 (4nm) to launch Q4 2027.
  • Customer Wins:: 42M HAI SoC installed base, 370+ customers; $13B auto pipeline (up from $19B total pipeline) for 6 years.
  • 2027 Guidance:: 10–15% revenue growth, 59–62% non-GAAP gross margin; Q4 2026 non-GAAP net profit $5.5M ($0.13 EPS).
  • Market Expansion:: CV7 offers 2.5x higher AI performance vs. CV5, with premium ASPs; IoT revenue grew 50% YoY in FY2026.

Segment Performance

The company's HAI revenue grew 50% year-over-year, with the new third-generation five-nanometer CV75 and CV72 AI SoCs rapidly growing, reaching a high single-digit percent of total revenue in Q4. Automotive revenue grew in the high single digits, and IoT revenue increased almost 50% year-over-year. The growth in units shipped and average selling price drove the company-wide revenue growth.

Outlook for FY2027

For fiscal year 2027, Ambarella anticipates total revenue growth in the 10% to 15% range, with non-GAAP gross margin within the long-term model of 59% to 62%. The recently announced CV7, a four-nanometer chip, is expected to begin generating revenue in the fourth quarter of 2027. Analysts estimate next year's revenue growth at 13.6%, aligning with the company's guidance.

Valuation

With a P/S Ratio of 6.33 and an EV/EBITDA of -33.21, the market is pricing in a certain level of growth for Ambarella. The company's ROE and ROIC are currently negative, but the growth in revenue and the introduction of new products like CV7 are expected to drive future profitability. The current valuation metrics suggest that the market is expecting a turnaround in the company's performance.

Pipeline and Customer Wins

Fermi Wang highlighted several customer wins, including industrial automation robotic design wins and automotive ADAS and telematics business. The company's auto pipeline has grown to $19,000,000,000, involving business opportunities for the next six years. The design wins and growing pipeline are expected to drive future revenue growth.

New Product Ramp-up

3. NewsRoom

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Is Now the Time to Sell or Buy Ambarella Stock After Its CFO Dumped Shares Worth Over $400,000?

Mar -23

Source: fool.com

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Insider Selling: Ambarella (NASDAQ:AMBA) Insider Sells $355,089.33 in Stock

Mar -22

Source: defenseworld.net

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Insider Selling: Ambarella (NASDAQ:AMBA) CEO Sells $437,613.62 in Stock

Mar -22

Source: defenseworld.net

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Ambarella (NASDAQ:AMBA) CFO Sells $241,528.29 in Stock

Mar -22

Source: defenseworld.net

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Insider Selling: Ambarella (NASDAQ:AMBA) VP Sells $249,549.33 in Stock

Mar -22

Source: defenseworld.net

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Algert Global LLC Increases Stake in Ambarella, Inc. $AMBA

Mar -15

Source: defenseworld.net

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Ambarella: It Will Need To Do A Lot To Get Back Investor Confidence

Mar -12

Source: seekingalpha.com

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Barclays PLC Raises Holdings in Ambarella, Inc. $AMBA

Mar -09

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.00%)

6. Segments

Video Compression, Image Processing and Computer Vision Solutions

Expected Growth: 14%

Ambarella's 14% growth in Video Compression, Image Processing, and Computer Vision Solutions is driven by increasing demand for high-definition video, autonomous vehicles, and smart home devices. Additionally, advancements in AI and machine learning, growing adoption of 4K and 8K resolutions, and rising need for efficient data processing and storage contribute to the segment's growth.

7. Detailed Products

CV22

A high-performance AI-enabled computer vision processor for smart home security cameras, doorbells, and other IoT devices.

CV25

A high-performance AI-enabled computer vision processor for professional surveillance cameras, smart cities, and industrial IoT applications.

CV28

A high-performance AI-enabled computer vision processor for automotive applications, including advanced driver-assistance systems (ADAS) and autonomous vehicles.

H22

A high-performance processor for 4K and 8K video recording and playback in action cameras, drones, and other consumer electronics.

H3

A high-performance processor for 4K and 8K video recording and playback in professional broadcast and cinematography applications.

S5L

A high-performance processor for 4K and 8K video recording and playback in security cameras and other IoT devices.

8. Ambarella, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Ambarella, Inc. faces moderate threat from substitutes due to the presence of alternative video processing solutions from competitors like Intel and Texas Instruments.

Bargaining Power Of Customers

Ambarella, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Ambarella, Inc. relies on a few key suppliers for components like memory and semiconductors. While the company has some bargaining power due to its size, suppliers still have some leverage due to the specialized nature of these components.

Threat Of New Entrants

The video processing market has high barriers to entry due to the need for significant investments in research and development, as well as the requirement for specialized expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The video processing market is highly competitive, with several established players like Intel, Texas Instruments, and HiSilicon. Ambarella, Inc. faces intense competition in terms of pricing, product features, and innovation.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.94%
Debt Cost 3.95%
Equity Weight 99.06%
Equity Cost 12.19%
WACC 12.11%
Leverage 0.95%

11. Quality Control: Ambarella, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Wolfspeed

A-Score: 4.2/10

Value: 9.6

Growth: 0.9

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
SiTime

A-Score: 3.6/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
Ambarella

A-Score: 3.5/10

Value: 4.6

Growth: 1.4

Quality: 4.0

Yield: 0.0

Momentum: 8.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Silicon Labs

A-Score: 3.4/10

Value: 4.6

Growth: 1.9

Quality: 2.8

Yield: 0.0

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Allegro MicroSystems

A-Score: 3.1/10

Value: 2.4

Growth: 1.6

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Power Integrations

A-Score: 2.7/10

Value: 1.6

Growth: 2.0

Quality: 5.6

Yield: 3.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

54.57$

Current Price

54.58$

Potential

-0.00%

Expected Cash-Flows