Ambarella: Ongoing Timing Issues Will Erode Confidence
- The forecasted timing issue with action camera revenues pulled forward in FQ2 is rolling over into the next two quarters.
- The stock trades at healthy multiples for a company facing stalling revenue growth.
- With the expectation that the market will lose confidence in Ambarella, the recommendation remains to hold off on buying the stock.
As presented in my previous research in early September, Ambarella (NASDAQ:AMBA) was likely to struggle in the short term as the company transitions away from a reliance on action cameras from a prime customer. Due to timing issues pulling revenues forward, the company previously predicted that FQ3 results would miss original high expectations.
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