NEW YORK (TheStreet) -- Shares of Ambarella (AMBA) are up 1.95% to $88.90 in early market trading after KeyBanc Capital Markets increased its price target to $96 from $78 and reiterated its "overweight" rating.
"We are raising estimates and our target on strong GoPro checks, combined with an updated longer-term view of AMBA's market opportunity," said KeyBanc Analyst Brad Erikson. "We think the company could earn $5 or more in C2018, implying upside to the mid-$90s."
This action comes after the Santa Clara, CA-based developer of semiconductor processing solutions saw inventory of GoPro video cameras decline month over month, leading KeyBanc analysts to believe that sales run rates have increased recently, likely driven by incremental bundling with gift cards and memory cards.
Ambarella has unique exposure to a host of diversified growth drivers like China action cameras, video surveillance, police cameras and drones, according to KeyBanc analysts.
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 some important positives, 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. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."