Ambarella Earnings: The Surge Could Make A New Dawn For Investors

(8min)

Summary

  • Ambarella projects over 25% y/y revenue growth for fiscal 2026, driven by strong product momentum in automotive and IoT sectors.
  • The company is debt-free with $230 million in cash, but its free cash flow is largely offset by stock-based compensation.
  • Valued at 11x forward sales, Ambarella offers a compelling entry point for long-term investors despite competitive pressures and market volatility.
  • Risks include potential inventory corrections and market downturns, which could impact investor willingness to pay the current valuation.
  • Looking for a helping hand in the market? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Learn More »

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Investment Thesis

Ambarella (NASDAQ:AMBA) delivers very strong guidance for fiscal Q4 2025. More specifically, it now appears that investors can count on 50% y/y revenue growth rates for the next quarter.

Consequently, I now expect to see more than

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This article was written by

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.

With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months.

Through his 10+ years analyzing countless companies, Michael has accumulated outstanding professional experience in tech and energy and a following of over 40K on Seeking Alpha.

Michael is the leader of the Investing Group Deep Value Returns.

Features of the group include: Insights through his concentrated portfolio of value stocks, timely updates on stock picks, a weekly webinar for live advice, and "hand-holding" as-needed for new and experienced investors alike. Deep Value Returns also has an active, vibrant, and kind community easily accessible via chat.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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