- Down moderately yesterday after the publication of a bearish SA PRO article from Ashraf Eassa, Ambarella (AMBA -7.2%) is falling hard today following the article's general release.
- Eassa argues the barrier to entry for Ambarella's wearable camera video-processing SoCs isn't that high, and that chipmakers such as Qualcomm, Nvidia, Intel, and Samsung could conceivably enter the market.
- He also calls Ambarella's valuation (4.6x EV/sales, 30x EV/FCF) "absurd," and estimates the company's Google Hangouts camera deal would only boost EPS by $0.32 even if 1M units were sold.
- Eassa thinks Ambarella's trajectory could resemble that of IPTV chip developer Sigma Designs, whose shares skyrocketed in 2007 but quickly came crashing back to Earth as competition intensified.
at CNBC.com (Tue, 5:05PM)