Ambarella Stock Analysis, Valuation (NASDAQ:AMBA)

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$48.52 $0.71 (1.44%) AMBA stock closing price Feb 21, 2018 (Closing)
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Ambarella
Updated on : Feb 21, 2018
previous close
AMBA 48.5 (0%)
NASDAQ 7218.2 (0%)
Closing Price On: Feb 21, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2018-Q3
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
22.3%
Operating Profit
Operating Margin:
13.8%
Sector Average:
5.3%
5 Quarter Net Profit
Net Margins
2018-Q3
%
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
$26.6M
Net Income:
$11.7M
PROS      CONS
Long Term Growth
Operating Margins
Net Margins
ROIC
FCF Margin
Recent Growth
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
AMBA PS :
5.1
Industry PS :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
61.2%
Return on Equity:
7.9%
Free Cash Flow Margin:
29.3%
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Ambarella Stock Analysis

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Investors can watch the Amigobulls Ambarella stock analysis video here. Our AMBA analysis video highlights revenue and profit trends along with other important metrics such as valuation to find what makes the stock attractive.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Ambarella Inc Stock Rating 3.6/5

Amigobulls AMBA stock analysis relies on business fundamentals such as Ambarella revenue growth, profits and return on equity measures from the latest quarter 2018 Q3 earnings. We also use relative valuation metrics like PE ratio and price to sales ratio for Ambarella valuation analysis. Ambarella stock rating encapsulates our opinion about the company based on the fundamentals.

Should you buy AMBA stock?

  • Long term revenue growth has been strong with a 5 year compounded annual growth of 22.3%.
  • Ambarella's average operating margin of 13.8% was exceptional.
  • LTM Net margins were good at 11.5% for Ambarella.
  • Ambarella has an attractive ROIC (Return on Invested Capital) of 61.2%
  • The company has a good Free Cash Flow (FCF) margin of 29.3%.

Should you sell AMBA stock?

  • Ambarella revenue saw a decline of -11.4% YoY in 2018 Q3.
  • AMBA stock is trading at a PE ratio of 46.2, which is worse than the industry average multiple of 25.3.
  • The company is trading at a price to sales multiple of 5.1, which is higher in comparison to the Electronics-Semiconductors industry average of 2.8, making AMBA stock expensive.

Comments on this video and Ambarella stock

Investors can make use of the Amigobulls Ambarella stock analysis to ascertain how AMBA stock fares in fundamental analysis investment criteria. The fundamentals of a company are vital to identify long-term investment opportunities.

Ambarella revenue growth is an indicator of the demand for a company's products while profit margin is indicative of company's pricing power and pricing strategy. One can also combine technical analysis and fundamental analysis to get a holistic picture about AMBA stock.