Ambarella (NASDAQ:AMBA) Shares Gap Down After Insider Selling

Key Points

• Ambarella shares gapped down after insider selling, opening at $82.52 versus a prior close of $91.84 and trading as low as $73.44.
• CEO Feng-Ming Wang sold 32,500 shares and CFO John Alexander Young sold 400 shares, with both transactions made under pre-arranged Rule 10b5-1 plans.
• Despite the stock drop, analysts remain generally constructive: the consensus rating is Moderate Buy with an average price target of $99.25, while recent results showed revenue growth and a strong long-term edge-AI agreement with Hanwha.

Shares of Ambarella, Inc. (NASDAQ:AMBA - Get Free Report) gapped down prior to trading on Friday following insider selling activity. The stock had previously closed at $91.84, but opened at $82.52. Ambarella shares last traded at $73.44, with a volume of 1,286,634 shares changing hands.

Specifically, CEO Feng-Ming Wang sold 32,500 shares of Ambarella stock in a transaction that occurred on Tuesday, May 26th. The stock was sold at an average price of $91.01, for a total transaction of $2,957,825.00. Following the completion of the transaction, the chief executive officer directly owned 806,061 shares in the company, valued at $73,359,611.61. The trade was a 3.88% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO John Alexander Young sold 400 shares of the company's stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $96.00, for a total value of $38,400.00. Following the completion of the sale, the chief financial officer directly owned 117,623 shares in the company, valued at approximately $11,291,808. The trade was a 0.34% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Wall Street Analyst Weigh In

Several research firms have weighed in on AMBA. Stifel Nicolaus set a $106.00 price target on Ambarella in a research report on Friday. Rosenblatt Securities reaffirmed a "buy" rating and set a $115.00 price objective on shares of Ambarella in a research note on Tuesday. Consumer Edge reissued a "buy" rating on shares of Ambarella in a research note on Friday, May 22nd. Susquehanna upped their target price on shares of Ambarella from $80.00 to $110.00 and gave the company a "positive" rating in a report on Friday. Finally, Summit Insights cut shares of Ambarella from a "buy" rating to a "hold" rating in a research note on Friday. One research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating, five have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $99.25.

Trending Headlines about Ambarella

Here are the key news stories impacting Ambarella this week:

• Positive Sentiment: Ambarella reported fiscal Q1 revenue of $100.4 million, up 16.9% year over year, while EPS of $0.11 matched estimates and revenue slightly topped forecasts, signaling steady execution in its edge-AI chip business. Ambarella (AMBA) Meets Q1 Earnings Estimates
• Positive Sentiment: The company guided second-quarter revenue to $105 million-$111 million, above Wall Street expectations at the midpoint, which suggests continued momentum into the next quarter. Ambarella outlines $105M-$111M Q2 revenue while Hanwha agreement targets $800M+ over 10+ years
• Positive Sentiment: Ambarella announced a long-term edge-AI agreement with Hanwha that could generate more than $800 million in potential revenue over 10+ years, reinforcing demand for its platform in robotics, industrial automation, and related markets. Hanwha and Ambarella Enter Into Long-Term Edge AI Agreement
• Positive Sentiment: Analyst sentiment improved after the results, with Needham reiterating Buy and raising its target to $100 and Bank of America lifting its target to $96, both citing longer-term edge-AI upside. Quinn Bolton Reiterates Buy on Ambarella, Sets $100 DCF-Based Price Target on Strengthening Auto, Robotics, and Long-Term Deal Momentum
• Neutral Sentiment: CEO Feng-Ming Wang and CFO John Alexander Young disclosed pre-arranged 10b5-1 stock sales, which are often viewed as routine trading activity rather than a strong fundamental signal. MarketBeat AMBA insider transactions

Ambarella Price Performance

The firm's 50-day moving average is $65.50 and its 200 day moving average is $68.42. The stock has a market cap of $3.20 billion, a price-to-earnings ratio of -41.26 and a beta of 2.17.

Ambarella (NASDAQ:AMBA - Get Free Report) last announced its quarterly earnings results on Thursday, May 28th. The semiconductor company reported $0.11 earnings per share for the quarter, meeting analysts' consensus estimates of $0.11. Ambarella had a negative net margin of 19.42% and a negative return on equity of 12.16%. The company had revenue of $100.36 million for the quarter, compared to analyst estimates of $100.12 million. During the same quarter last year, the business earned $0.07 EPS. Ambarella's revenue for the quarter was up 16.9% on a year-over-year basis. On average, sell-side analysts forecast that Ambarella, Inc. will post -1.27 EPS for the current year.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in AMBA. Vanguard Group Inc. grew its holdings in shares of Ambarella by 6.0% during the 4th quarter. Vanguard Group Inc. now owns 5,480,285 shares of the semiconductor company's stock worth $388,223,000 after purchasing an additional 311,649 shares during the period. State Street Corp lifted its holdings in shares of Ambarella by 8.9% during the 2nd quarter. State Street Corp now owns 1,855,170 shares of the semiconductor company's stock valued at $122,562,000 after acquiring an additional 151,694 shares in the last quarter. Jericho Capital Asset Management L.P. boosted its position in Ambarella by 30.8% during the 4th quarter. Jericho Capital Asset Management L.P. now owns 1,587,081 shares of the semiconductor company's stock worth $112,429,000 after purchasing an additional 373,734 shares during the period. The Manufacturers Life Insurance Company increased its holdings in Ambarella by 49.5% in the 1st quarter. The Manufacturers Life Insurance Company now owns 1,586,082 shares of the semiconductor company's stock valued at $81,644,000 after purchasing an additional 524,937 shares in the last quarter. Finally, Geode Capital Management LLC grew its stake in shares of Ambarella by 3.6% in the fourth quarter. Geode Capital Management LLC now owns 1,020,527 shares of the semiconductor company's stock valued at $72,305,000 after buying an additional 35,510 shares in the last quarter. 82.09% of the stock is owned by hedge funds and other institutional investors.

About Ambarella

Ambarella, Inc is a global semiconductor company headquartered in Santa Clara, California, specializing in video compression, image processing and computer vision technologies. The company designs low-power, high-definition system-on-chip (SoC) solutions that enable the capture, processing and streaming of video in a variety of embedded applications. Ambarella's platforms combine advanced video encoding, multi-core central processing units and hardware accelerators to deliver high-resolution imaging with low power consumption.

Ambarella's product portfolio caters to multiple markets, including security and surveillance, automotive vision, wearable cameras, drones and robotics.

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