NEW YORK (TheStreet) -- Ambarella (AMBA) - Get Report stock closed up 5.26% to $46.40 on Monday as Stifel analysts said the chipmaker's fiscal 2016 fourth quarter financial report could exceed expectations, Barron's reports.
Santa Clara, CA-based Ambarella, a manufacturer of action and security cameras processors, will release its quarterly report on Thursday after the market close.
Revenue from Internet protocol (IP) surveillance cameras is expected to account for nearly half of total revenue as the company reduces its dependency on GoPro (GPRO), Stifel said in an analysts note, according to Barron's. (See video above)
Ambarella's stock is often tied to its customer GoPro's stock, which has been pressured by weak sales.
"We expect that following the GoPro-related revenue correction, Ambarella's top line can resume its +20% annual growth," analysts added, Barron's noted. "This growth is driven by new markets the company's video processing technology is creating such as IP surveillance, wearables, flying and automotive cameras."
Ambarella is expected to deliver a year-over-year decline in earnings per share, but a 2.1% increase in revenue on Thursday afternoon.
Overall, Wall Street is anticipating earnings of 48 cents per share on revenue of $66.09 million for the latest quarter.
Last year, Ambarella reported earnings of 68 cents per share on revenue of $64.7 million for the quarter ended January 31, 2015.
Separately, Ambarella has a "buy" rating and a letter grade of B- at TheStreet Ratings because of the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations.
You can view the full analysis from the report here: AMBA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.