IB Net Payout Yields Model

Ambarella: Never Ending Decline

After the close, Ambarella (AMBA) reported FQ4 quarterly results that beat estimates. The guidance for FQ1 just shows how the CV chips can't gain traction. After reporting FQ4 revenues of $51.1 million, the company gave horrible guidance for the current quarter.

Revenues are expected to keep dipping along with gross margins. Even worse, the forecast is for an operating loss in the $3+ million range.  Continue to avoid the hype of the computer visions chips of Ambarella with no signs that major customers are actually glamoring for the chips.

Update 3/6
Ambarella closed up 3.75% on ugly FQ4 numbers. The move was an interesting sign that the stock has actually reached bottom. The Craig-Hallum upgrade with a $53 price target probably deserved a larger jump, if the market had actually turned on Ambarella.

The company is still struggling to prove on auto OEMs are going to suddenly use computer vision cameras from Ambarella when already having deals with other industry players for ADAS.  Until the company signs a deal with a major automotive player, avoid the stock.

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