Investors Are Expecting Great Results Today From This Key GoPro Supplier

After the closing bell today key GoPro (GPRO) partner Ambarella (AMBA) will report its fourth quarter earnings. 

At the start of 2013 little known Ambarella was trading at a modest $8 per share. Today the stock is trading at over $60. 

In GoPro’s S-1 filing leading up its IPO the company cautioned that there was one component maker it relied upon and had no substitute for. That vital supplier is Ambarella. Ambarella produces the high-tech video recording and processing chips which make the magic of GoPro possible.

When a company with a $5.2 billion market cap admits that it has no alternative to using your products, you’re sitting pretty. Ambarella’s position as a irreplaceable chip maker for GoPro has resulted in a tremendous amount of success over the past 2 years.

Last quarter Ambarella came out with stellar earnings in anticipation of GoPro’s holiday period upgrade cycle. Sure enough when GoPro reported its fourth quarter results in early February, profits were off the charts.

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After the closing bell today we’ll get our first hint at how many cameras GoPro expects to sell beyond the December period. Wall Street expects Ambarella’s earnings to come in around 48 cents per share and quarterly revenue to add up to $57 million. The crowd at Estimize is forecasting much stronger earnings, looking for 53 cents in EPS on top of $59 million in revenue. 

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In the wake of GoPro’s 4th quarter earnings report which crushed the Wall Street consensus, investors are expecting Ambarella to keep the momentum going. 

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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Comments

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Corey Gaber 4 years ago Member's comment

$AMBA, unlike $GPRO had a very strong 5D. Also Gpro needs amba not the other way around.

Dick Kaplan 4 years ago Member's comment

35-40% of $AMBA rev comes from $GPRO; they may not need them, but it sure does help.