Ambarella (AMBA) AI Stock Analysis

• Market Cap: $3.24B
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.07
• Revenue Growth: 48.08%
• EPS Growth: 51.23%
• Country: US
• Employees: 941
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.27
• Shares Outstanding: 43,050,488
• 10 Day Avg. Volume: 1,076,597
• 30 Day Avg. Volume: 1,038,830
• 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: 1.04
• Enterprise Value/Revenue: 9.02
• Enterprise Value/Gross Profit: 15.09
• Enterprise Value/Ebitda: -47.12
• 1Y Price Target: $96.70
• Price Target Upside: 31.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 0.49
• Revenue Forecast (FY): $379.80M

• Rating: 59 Neutral
• Price Target: $80.00 ▲(8.40% Upside)

Ambarella's overall stock score reflects a mixed outlook. The most significant factor is the company's financial performance, which shows positive revenue growth but struggles with profitability. The earnings call provided a positive outlook with increased revenue guidance, but technical analysis and valuation present challenges. Corporate events add some uncertainty, but the company's strategic focus on AI technology offers potential for long-term growth.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Ambarella's products, particularly in Edge AI, supporting long-term business expansion.

Edge AI Product Success

Sustained growth in Edge AI products highlights Ambarella's competitive edge in AI-driven solutions, reinforcing its market position.

Strong Free Cash Flow

Robust free cash flow growth enhances financial flexibility, enabling investment in innovation and strategic initiatives.

Negative Factors

Profitability Concerns

Persistent profitability issues may hinder reinvestment capacity and affect long-term financial health.

Gross Margin Pressure

Declining gross margins could impact profitability, limiting resources available for growth and innovation.

Leadership Changes

Leadership transitions can introduce strategic uncertainty, potentially affecting innovation and operational continuity.

Ambarella Business Overview & Revenue Model

Company Description

Ambarella (AMBA) is a technology company specializing in advanced video compression and image processing solutions. Headquartered in Santa Clara, California, Ambarella develops a range of semiconductor products that are primarily used in high-definition video applications, including security cameras, drones, automotive cameras, and consumer electronics. The company operates in diverse sectors such as security, automotive, and consumer markets, offering innovative solutions that leverage artificial intelligence and machine learning for enhanced video analytics and processing capabilities.

How the Company Makes Money

Ambarella generates revenue primarily through the sale of its semiconductor products, which includes system-on-chip (SoC) solutions designed for video and image processing. The company has established significant partnerships with leading manufacturers in the security, automotive, and consumer electronics industries, which help drive demand for its products. Key revenue streams include sales from its core video processing chipsets, royalties from licensing its intellectual property, and ongoing support and development services for its technology. Additionally, the increasing trend towards security and surveillance, as well as the growth of autonomous vehicles, contributes to Ambarella's earnings potential by expanding its customer base and product applications.

Ambarella Financial Statement Overview

Summary

Ambarella's financial performance is mixed. Revenue growth is positive at 10.05%, but profitability is a concern with negative net profit margins and returns on equity. The balance sheet is stable with low leverage, but cash flow is declining, which could impact future investments.

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

Ambarella Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 73.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMBA, the sentiment is Negative. The current price of 73.8 is below the 20-day moving average (MA) of 78.61, below the 50-day MA of 82.65, and above the 200-day MA of 67.24, indicating a neutral trend. The MACD of -2.50 indicates Positive momentum. The RSI at 41.29 is Neutral, neither overbought nor oversold. The STOCH value of 65.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMBA.

Ambarella Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAMT	76 Outperform	$5.12B	123.73	8.76%	―	21.12%	-54.97%
SIMO	72 Outperform	$2.98B	30.18	11.88%	2.29%	-2.26%	9.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
POWI	61 Neutral	$2.02B	116.18	2.53%	2.31%	10.50%	-52.00%
AMBA	59 Neutral	$3.24B	-39.21	-13.92%	―	48.08%	51.23%
SLAB	56 Neutral	$4.48B	-50.89	-8.00%	―	47.10%	64.29%
SYNA	52 Neutral	$3.02B	―	-3.16%	―	13.24%	-129.14%

Ambarella Corporate Events

Ambarella CTO Leslie Kohn Resigns, Shifts to Advisory Role

On November 24, 2025, Leslie Kohn resigned from his roles as a director and Chief Technology Officer at Ambarella for personal reasons, transitioning to a part-time role as Chief Technology Advisor. Ambarella reported a significant financial performance for the third quarter of fiscal year 2026, with a 31.2% increase in revenue compared to the previous year, and a notable improvement in non-GAAP net profit. The company also provided optimistic guidance for the fourth quarter, highlighting strong growth and a promising outlook for edge AI applications.