What To Watch For From Ambarella

Ambarella (AMBA) is set to release their FQ1’19 earnings after the market closes on Tuesday, June 5th. Estimize expects an EPS consensus of $0.14, which is more bullish that Wall Street’s $0.09.  Estimize predicts a YoY Growth Rate of -77%, which would continue the negative trend seen in their past three fiscal quarters.  Estimize expects revenue to come in at $56.95M whereas Wall Street anticipates a slightly lower revenue of  $56.23M. Estimize beats Wall Street’s predicted EPS 100% of the time, therefore it can be expected to see an EPS closer to Estimize’s value.

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Ambarella’s decline in financial performance positively correlates with what investors have seen from AMBA’s biggest client: GoPro. As the demand for action cameras continues to diminish in the market, GoPro’s sales have deteriorated. Estimize predicts GoPro’s EPS YoY Growth Rate to be -144% for the upcoming quarter. This presents a red flag for Ambarella investors because Ambarella’s revenue is heavily impacted by GoPro’s performance.

Recently, Ambarella has been attempting to integrate itself into the automotive industry; however, success will be difficult given the great level of competition already present in the industry. Ambarella is confident that they will grow to be successful in this sphere, but they are falling far behind other sector leaders in the race toward autonomous vehicles.

Disclosure: There can be no assurance that the information we considered is accurate or complete, nor can there be any assurance that our assumptions are correct.

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