Trade-Ideas LLC identified

Ambarella

(

AMBA

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ambarella as such a stock due to the following factors:

  • AMBA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $95.6 million.
  • AMBA has traded 307,765 shares today.
  • AMBA is up 3% today.
  • AMBA was down 6.2% yesterday.

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More details on AMBA:

Ambarella, Inc. develops semiconductor processing solutions for video that enable high-definition (HD) video capture, sharing, and display worldwide. AMBA has a PE ratio of 25. Currently there are 7 analysts that rate Ambarella a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Ambarella has been 2.9 million shares per day over the past 30 days. Ambarella has a market cap of $1.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.35 and a short float of 44.3% with 7.32 days to cover. Shares are up 8.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ambarella as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • AMBA's very impressive revenue growth greatly exceeded the industry average of 10.9%. Since the same quarter one year prior, revenues leaped by 79.3%. Growth in the company's revenue appears to have helped boost 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 5.15, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, AMBARELLA INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • AMBARELLA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMBARELLA INC increased its bottom line by earning $1.56 versus $0.85 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $1.56).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 148.1% when compared to the same quarter one year prior, rising from $9.31 million to $23.10 million.

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