For the first quarter Ambarella reported EPS of 25 cents a share, beating the Capital IQ Consensus Estimate of 21 cents a share by 4 cents. The chipmaker reported revenue of $40.92 million for the quarter, an increase of 20.6% from the year-ago period. Analysts expected revenue of $40 million for the quarter.
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- The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 26.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AMBA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.39, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for AMBARELLA INC is rather high; currently it is at 64.73%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.84% trails the industry average.
- Powered by its strong earnings growth of 38.46% and other important driving factors, this stock has surged by 63.16% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- You can view the full analysis from the report here: AMBA Ratings Report