Ambarella (NASDAQ:AMBA) Trading Up 11.3% - Time to Buy?

Key Points

• Ambarella shares jumped 11.3% on Monday, trading as high as $87.00, after closing at $78.36 the prior session. Trading volume was well below average, with about 238,753 shares changing hands.
• Wall Street remains cautiously positive: the stock carries a consensus rating of “Moderate Buy” with an average price target of $101.12. Recent analyst moves were mixed, including a downgrade from Summit Insights and higher targets from firms like Rosenblatt, Bank of America, and Susquehanna.
• Ambarella’s latest results were solid but still unprofitable, as quarterly EPS matched expectations at $0.11 and revenue rose 16.9% year over year to $100.36 million. The company continues to post negative margins, while insiders have been selling shares and institutional investors remain heavily invested.

Ambarella, Inc. (NASDAQ:AMBA - Get Free Report)'s share price rose 11.3% during trading on Monday . The company traded as high as $87.00 and last traded at $87.2350. 238,753 shares traded hands during mid-day trading, a decline of 79% from the average daily volume of 1,158,656 shares. The stock had previously closed at $78.36.

Analysts Set New Price Targets

A number of research firms have recently weighed in on AMBA. Summit Insights cut shares of Ambarella from a "buy" rating to a "hold" rating in a report on Friday, May 29th. Rosenblatt Securities boosted their price objective on shares of Ambarella from $115.00 to $120.00 in a research note on Tuesday, June 30th. Weiss Ratings reissued a "sell (e+)" rating on shares of Ambarella in a research report on Friday, June 26th. Bank of America raised their target price on shares of Ambarella from $72.00 to $96.00 and gave the company a "neutral" rating in a research note on Friday, May 29th. Finally, Susquehanna upped their price target on Ambarella from $80.00 to $110.00 and gave the stock a "positive" rating in a research report on Friday, May 29th. One analyst has rated the stock with a Strong Buy rating, seven have issued a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $101.12.

Ambarella Trading Up 6.5%

The firm has a 50-day moving average of $74.00 and a 200-day moving average of $66.50. The stock has a market capitalization of $3.66 billion, a price-to-earnings ratio of -51.89 and a beta of 2.11.

Ambarella (NASDAQ:AMBA - Get Free Report) last issued its quarterly earnings results on Thursday, May 28th. The semiconductor company reported $0.11 EPS for the quarter, hitting analysts' consensus estimates of $0.11. The company had revenue of $100.36 million during the quarter, compared to analysts' expectations of $100.12 million. Ambarella had a negative return on equity of 10.94% and a negative net margin of 17.18%.The firm's revenue was up 16.9% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.07 EPS. On average, equities research analysts anticipate that Ambarella, Inc. will post -1.13 EPS for the current year.

Insider Transactions at Ambarella

In related news, CEO Feng-Ming Wang sold 32,500 shares of Ambarella stock in a transaction dated 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 sale, the chief executive officer owned 806,061 shares of the company's stock, valued at $73,359,611.61. The trade was a 3.88% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Chan W. Lee sold 2,951 shares of the stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $67.87, for a total transaction of $200,284.37. Following the completion of the transaction, the insider owned 157,098 shares in the company, valued at approximately $10,662,241.26. This trade represents a 1.84% decrease in their position. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 87,432 shares of company stock valued at $7,241,303. 4.50% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the business. Vanguard Group Inc. boosted its holdings in Ambarella by 6.0% in the fourth quarter. Vanguard Group Inc. now owns 5,480,285 shares of the semiconductor company's stock valued at $388,223,000 after purchasing an additional 311,649 shares during the last quarter. State Street Corp raised its stake 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 buying an additional 151,694 shares during the last quarter. Jericho Capital Asset Management L.P. lifted its holdings in shares of Ambarella by 30.8% in the 4th quarter. Jericho Capital Asset Management L.P. now owns 1,587,081 shares of the semiconductor company's stock valued at $112,429,000 after buying an additional 373,734 shares during the period. The Manufacturers Life Insurance Company lifted its holdings in shares of 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 buying an additional 524,937 shares during the period. Finally, Geode Capital Management LLC boosted 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 worth $72,305,000 after buying an additional 35,510 shares during the last quarter. Hedge funds and other institutional investors own 82.09% of the company's stock.

Ambarella Company Profile

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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