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NEW YORK (TheStreet) -- Ambarella (AMBA) - Get Ambarella, Inc. Report stock is decreasing 2.94% to $56.18 in after-hours trading on Thursday after the company set its fiscal 2016 fourth quarter revenue guidance below estimates because of weakness in the wearable and mountable camera market.

The company, which makes chips for cameras, expects its fourth quarter revenue to range between $65 million and $67.5 million, falling short of estimates of $76.3 million.

"We are experiencing near term headwinds in the wearable sports market which is expected to negatively impact revenue in Q4 of this year," CEO Fermi Wang said in a statement.

The company did report better than expected fiscal 2016 third quarter financial results.

Ambarella posted earnings of $1.08 per share for the quarter ended October 31, exceeding expectations by 22 cents.

Revenue increased 41.9% year-over-year to $93.2 million, beating estimates of $89.9 million.

"Our strong third quarter results reflect our success in expanding revenues in new markets such as flying cameras and home security monitoring, as well as existing markets for professional IP security cameras and automotive after-market dash cameras," Wang noted.

TheStreet Recommends

Separately, TheStreet Ratings team rates AMBARELLA INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate AMBARELLA INC (AMBA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

You can view the full analysis from the report here: AMBA

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