Ambarella (NASDAQ:AMBA) Trading Up 17.9% – Time to Buy?

Ambarella, Inc. (NASDAQ:AMBA)’s share price was up 17.9% during trading on Friday . The stock traded as high as $78.24 and last traded at $87.3550. Approximately 887,582 shares were traded during mid-day trading, a decline of 28% from the average daily volume of 1,228,830 shares. The stock had previously closed at $74.09.

Key Headlines Impacting Ambarella

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Potential NXP acquisition: NXP is reportedly in talks to buy Ambarella, whose computer-vision and AI chips are used in automotive cameras, autonomous-driving systems, security equipment and other edge-AI applications. A transaction could provide investors with a substantial premium, although no agreement, offer price or deal terms have been announced. Reuters article Financial Times article
• Positive Sentiment: Renewed edge-AI optimism: Investors are revisiting Ambarella’s growth potential in automotive and physical-AI markets. Management previously forecast quarterly revenue of $105 million to $111 million and highlighted strong edge-AI demand, while a long-term Hanwha agreement could generate more than $800 million in potential revenue. Quiver Quantitative analysis
• Neutral Sentiment: Analyst upside remains: Recent analyst price targets range from $96 to $120, with a median of $110, but these targets predate the reported acquisition discussions and may not reflect a potential takeover valuation.
• Negative Sentiment: Deal and execution risks remain: The reported talks may not result in a transaction, and Ambarella remains unprofitable on a trailing basis. Separately, disclosed insider activity showed selling rather than purchases over the past six months, a cautionary signal despite the takeover-related enthusiasm.

Analyst Upgrades and Downgrades

Several equities analysts recently issued reports on the stock. Susquehanna boosted their target price on shares of Ambarella from $80.00 to $110.00 and gave the company a “positive” rating in a research note on Friday, May 29th. Weiss Ratings raised shares of Ambarella from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Friday, July 10th. Consumer Edge restated a “buy” rating on shares of Ambarella in a research note on Friday, May 22nd. Summit Insights cut Ambarella from a “buy” rating to a “hold” rating in a report on Friday, May 29th. Finally, Bank of America raised their price objective on Ambarella from $72.00 to $96.00 and gave the company a “neutral” rating in a report on Friday, May 29th. One research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, five have given a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $101.12.

Ambarella Stock Up 16.1%

The firm has a market cap of $3.77 billion, a PE ratio of -53.42 and a beta of 2.11. The firm has a 50-day moving average price of $72.56 and a two-hundred day moving average price of $66.46.

Ambarella (NASDAQ:AMBA) last announced its quarterly earnings data on Thursday, May 28th. The semiconductor company reported $0.11 earnings per share for the quarter, meeting analysts’ consensus estimates of $0.11. The company had revenue of $100.36 million for the quarter, compared to analyst estimates of $100.12 million. Ambarella had a negative return on equity of 10.94% and a negative net margin of 17.18%.The firm’s revenue for the quarter was up 16.9% on a year-over-year basis. During the same quarter last year, the firm posted $0.07 EPS. Research analysts forecast that Ambarella, Inc. will post -1.13 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Ambarella news, CFO John Alexander Young sold 5,033 shares of the firm’s stock in a transaction that occurred on Wednesday, June 17th. The shares were sold at an average price of $67.54, for a total value of $339,928.82. Following the transaction, the chief financial officer directly owned 112,590 shares of the company’s stock, valued at $7,604,328.60. This trade represents a 4.28% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Chan W. Lee sold 2,951 shares of the business’s stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $67.87, for a total value of $200,284.37. Following the transaction, the insider owned 157,098 shares in the company, valued at approximately $10,662,241.26. This represents a 1.84% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 91,419 shares of company stock worth $7,591,700 in the last 90 days. Corporate insiders own 4.50% of the company’s stock.

Institutional Trading of Ambarella

Several large investors have recently added to or reduced their stakes in AMBA. Price T Rowe Associates Inc. MD increased its position in Ambarella by 2,312.6% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 864,610 shares of the semiconductor company’s stock worth $61,250,000 after purchasing an additional 828,773 shares during the last quarter. UBS Group AG boosted its holdings in Ambarella by 379.3% in the 3rd quarter. UBS Group AG now owns 821,747 shares of the semiconductor company’s stock valued at $67,811,000 after purchasing an additional 650,306 shares during the last quarter. Squarepoint Ops LLC purchased a new stake in shares of Ambarella in the 2nd quarter valued at approximately $36,810,000. The Manufacturers Life Insurance Company grew its stake in shares of Ambarella by 49.5% in the 1st quarter. The Manufacturers Life Insurance Company now owns 1,586,082 shares of the semiconductor company’s stock valued at $81,644,000 after buying an additional 524,937 shares during the period. Finally, Balyasny Asset Management L.P. grew its stake in shares of Ambarella by 894.7% in the 2nd quarter. Balyasny Asset Management L.P. now owns 459,562 shares of the semiconductor company’s stock valued at $30,361,000 after buying an additional 413,362 shares during the period. 82.09% of the stock is currently owned by hedge funds and other institutional investors.

Ambarella Company Profile

Ambarella, Inc is a global semiconductor company headquartered in Santa Clara, California, specializing in video compression, image processing and computer vision technologies. The company designs low-power, high-definition system-on-chip (SoC) solutions that enable the capture, processing and streaming of video in a variety of embedded applications. Ambarella’s platforms combine advanced video encoding, multi-core central processing units and hardware accelerators to deliver high-resolution imaging with low power consumption.

Ambarella’s product portfolio caters to multiple markets, including security and surveillance, automotive vision, wearable cameras, drones and robotics.