The analyst firm also raised its fiscal 2016 EPS estimates for Ambarella to $3.20 a share from its previous estimates of $2.39 a share. Keybanc raised its fiscal 2017 EPS estimates for the company to $4.11 a share from $3.29 a share.
The price target and EPS estimates come after Ambarella beat analysts' estimates for earnings and revenue in the fiscal first quarter. Ambarella reported earnings of 71 cents a share, above analysts' estimates of 59 cents a share for the quarter. Revenue grew 73.5% year over year to $71.01 million for the quarter, compared to analysts' estimates of $67.36 million for the quarter.
Keybanc analyst Brad Erickson wrote, "Based on the report and guidance, we estimate Ambarella will ship SoCs into roughly 400,000 drones next quarter alone! Pretty impressive for a market that we think did roughly a half a million units total all last year. With drone products running approximately 75% of gross margins and remaining north of 10% of total revenues for the year, this segment has quickly turned into 15% of the company's total operating profit, with high growth not likely to slow down anytime soon."
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 number of 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. 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."
You can view the full analysis from the report here: AMBA Ratings Report