Ambarella (AMBA) AI Stock Analysis

• Market Cap: $3.83B
• Dividend Yield: N/A
• Average Volume (3M): 518.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.26
• Revenue Growth: 57.91%
• EPS Growth: 51.16%
• Country: US
• Employees: 941
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.15
• Shares Outstanding: 42,689,007
• 10 Day Avg. Volume: 545,993
• 30 Day Avg. Volume: 518,754
• PEG Ratio: 0.82
• Price to Book (P/B): 5.64
• Price to Sales (P/S): 11.12
• P/FCF Ratio: 135.10
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 7.34
• Enterprise Value/Gross Profit: 12.27
• Enterprise Value/Ebitda: -33.42
• 1Y Price Target: $96.60
• Price Target Upside: 2.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: $94.00 ▼(-0.44% Downside)

Ambarella's overall stock score is driven by strong technical indicators and positive earnings call sentiment, indicating growth potential. However, financial performance and valuation concerns, particularly negative profitability and a high P/E ratio, weigh down the score.

Positive Factors

Revenue Growth

The company's strong revenue growth, driven by increased demand and higher average selling prices, indicates robust market penetration and product adoption, which are essential for long-term business sustainability.

Edge AI Expansion

The consistent growth in edge AI applications highlights Ambarella's strategic focus on high-growth segments, enhancing its competitive position and offering durable revenue streams.

Strategic Partnerships

Strategic partnerships with industry leaders enhance market reach and product integration, supporting sustained revenue growth and competitive advantage in the semiconductor industry.

Negative Factors

Profitability Challenges

Persistent profitability issues, indicated by negative margins, suggest operational inefficiencies that could hinder long-term financial health and investor confidence.

Automotive Market Challenges

Challenges in the automotive sector, a key growth area, may slow revenue growth and impact strategic expansion plans, affecting long-term market positioning.

Gross Margin Pressure

Sustained margin pressures due to product mix can limit profitability improvements, affecting the company's ability to reinvest in growth and innovation.

Ambarella Business Overview & Revenue Model

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.

How the Company Makes Money

Ambarella generates revenue primarily through the sale of its semiconductor products, including SoCs, which are used in a wide range of applications from drones to security cameras and automotive systems. The company’s revenue model is driven by the sale of integrated circuits and related software to original equipment manufacturers (OEMs) and original design manufacturers (ODMs). Key revenue streams include licensing fees from its proprietary video compression technology, as well as royalties from customers who integrate its technology into their products. Additionally, Ambarella has formed strategic partnerships with major players in the automotive and consumer electronics industries, which help to expand its market reach and drive sales growth. Factors contributing to its earnings also include the increasing demand for high-resolution video and the expansion of AI-driven applications in video processing.

Ambarella Financial Statement Overview

Summary

Ambarella's financial performance is mixed. While revenue growth is positive, profitability remains a challenge with negative margins and returns. The balance sheet is strong with low leverage, but the negative return on equity indicates inefficiencies. Cash flow management shows resilience, but declining free cash flow growth could pose future challenges.

Income Statement

Ambarella's income statement shows a mixed performance. The company has experienced a positive revenue growth rate of 10.05% in the TTM, indicating a recovery from previous declines. However, profitability remains a concern with negative net profit, EBIT, and EBITDA margins, reflecting ongoing operational challenges. The gross profit margin is relatively healthy at 59.82%, but the negative net profit margin of -25.46% highlights significant cost pressures or inefficiencies.

Balance Sheet

The balance sheet of Ambarella is relatively stable with a low debt-to-equity ratio of 0.006, indicating minimal leverage and financial risk. However, the return on equity is negative at -15.65%, suggesting that the company is not generating sufficient returns on shareholder investments. The equity ratio is strong, reflecting a solid capital structure, but the negative ROE points to profitability issues.

Cash Flow

Ambarella's cash flow statement shows a decline in free cash flow growth by -8.24% in the TTM, which could impact future investments or debt repayments. The operating cash flow to net income ratio is 0.50, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 0.78, suggesting that the company is managing to convert a significant portion of its net income into free cash flow despite profitability challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	348.05M	284.87M	226.47M	337.61M	331.86M	222.99M
Gross Profit	208.20M	172.33M	136.82M	208.93M	208.13M	135.57M
EBITDA	-76.41M	-100.53M	-129.75M	-54.32M	-15.64M	-49.20M
Net Income	-88.63M	-117.13M	-169.42M	-65.39M	-26.41M	-59.79M
Balance Sheet
Total Assets	706.43M	688.97M	657.65M	710.20M	657.54M	573.28M
Cash, Cash Equivalents and Short-Term Investments	261.18M	250.26M	219.93M	206.86M	171.04M	440.71M
Total Debt	3.44M	5.26M	5.34M	8.64M	11.71M	10.44M
Total Liabilities	129.91M	127.56M	97.78M	104.11M	110.37M	98.30M
Stockholders Equity	576.52M	561.41M	559.87M	606.09M	547.18M	474.98M
Cash Flow
Free Cash Flow	45.67M	23.45M	7.05M	29.04M	29.12M	25.86M
Operating Cash Flow	52.36M	33.84M	19.02M	44.09M	38.80M	30.80M
Investing Cash Flow	-67.38M	-40.53M	7.84M	-107.30M	-119.55M	-31.32M
Financing Cash Flow	4.28M	6.40M	4.51M	5.70M	10.53M	10.40M

Ambarella Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBA, the sentiment is Positive. The current price of 94.42 is above the 20-day moving average (MA) of 85.25, above the 50-day MA of 83.74, and above the 200-day MA of 66.63, indicating a bullish trend. The MACD of 2.14 indicates Negative momentum. The RSI at 65.43 is Neutral, neither overbought nor oversold. The STOCH value of 74.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMBA.

Ambarella Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAMT	76 Outperform	$5.69B	43.98	8.76%	―	27.88%	37.85%
SIMO	76 Outperform	$3.18B	32.25	11.88%	1.93%	-2.26%	9.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
POWI	61 Neutral	$1.95B	112.46	2.53%	2.30%	10.50%	-52.00%
AMBA	57 Neutral	$3.83B	―	-15.77%	―	57.91%	51.16%
SLAB	55 Neutral	$4.15B	―	-8.00%	―	47.10%	64.29%
SYNA	55 Neutral	$2.58B	―	-3.16%	―	13.24%	-129.14%

Ambarella Corporate Events

Ambarella Inc. Earnings Call Highlights Strong Growth

Ambarella Inc. recently held its earnings call, revealing a positive sentiment driven by strong revenue growth and record performance in edge AI. The company has successfully penetrated new markets and experienced increased demand, despite facing challenges in the automotive sector and margin pressures. The outlook remains optimistic due to expansion into new markets and rising average selling prices (ASPs).

Ambarella Reports Strong Q2 Revenue Growth

Ambarella, Inc. is a semiconductor company specializing in edge AI technology, providing solutions for video security, automotive, and robotics applications.