Ambarella ‘an interesting takeout candidate,’ says Stifel

After Bloomberg reported that Ambarella (AMBA) is reviewing strategic alternatives, which may include a potential sale of the company, Stifel reported that when management was asked about the Bloomberg story of a potential sale process, the response was “no comment.” However, when discussing long-term strategy, the company was asked if being part of a larger company could accelerate momentum and the answer was “there are certain advantages to having more scale,” according to the analyst, who is currently hosting investor meetings with management, including the CEO, CFO, and VP of Corporate Development. The firm believes Ambarella has “always been considered an interesting takeout candidate,” but it sees “strong arguments” for the company “either as an organic entity or as a potential takeout candidate.” The firm, which emphasize that its investment thesis is “independent of any potential acquisition,” reiterates a Buy rating and 12-month price target of $80 on Ambarella shares.