Ambarella: Wait For The Next Dip
- Ambarella reported a solid FQ3'21 quarter with revenues growing 64%.
- The company increased the estimated 6-year automotive revenue funnel to $1.8 billion.
- Investors should wait for the next 20% dip with the stock trading at 20x FY23 revenues and only forecast to grow at a 20% clip.
- This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
Ambarella (AMBA) shareholders have seen the stock surge in the last few months as the company has signed up several automotive chip deals. The stock was attractive on the last dip into the $80s, but Wall Street has again gotten too excited about the future of their computer vision chips. My investment thesis is again Bearish on the stock near $200 until the next major dip.
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Update - Jan. 25
The predicted dip has occurred. Now the question is whether $AMBA will hold here or close the gap to $100. My guess would be the later.