Ambarella Inc (NASDAQ: AMBA)
Ambarella stock had a bit of a rough day in early trading yesterday as investors started to sell leading up to the release of the company’s FY2016 Q1 earnings report. However, the earnings came in better than expected; leading to gains. Today, we’ll talk about the AMBA earnings report, how investors reacted, and what we can expect to see moving forward. So, let’s get right to it…
Ambarella Beats Earnings Expectations
Yesterday, Ambarella released it’s earnings report for the first quarter of fiscal year 2016; blowing away EPS expectations in the process. In the report, AMBA showed that they had generated $0.71 per share; analysts estimated that the company would produce $0.59 per share in the quarter. Revenue also beat expectations, coming in at $71.01 million for the quarter while analysts expected to see the company generate $67.36 million. Here’s what Fermi Wang, President and CEO of Ambarealla had to say…
“In addition to continued growth from our existing wearable, IP security and automotive video recorder camera markets, we see increased activity across a wide range of home monitoring cameras including models by U.S. service providers, as well as from quadcopters or flying cameras…We look forward to continued success, as we enable the next generation of intelligent HD and Ultra HD cameras.”
How AMBA Reacted In The Market
Yesterday, we saw after hours growth around 1.6%; leading to a strong day in the market today. Currently (1:54), AMBA is trading at $95.00 per share after a gain of 3.03% so far today.
What We Can Expect To See Moving Forward
I’m expecting to see growth from AMBA in both the short and long term. Here’s why…
Short Term – In the short term, AMBA is likely to climb based on investor excitement. The bottom line is that investors invest in hopes of making money. So, when reports come out proving that a company made more money than expected, like we see with Ambarella’s earnings report, we tend to see gains. So, in the short run, I’m expecting investor excitement to continue driving the price of the stock up overall.
Long Run – In the long run, I’m also expecting to see great things from AMBA. This technology company is a leader in innovation with regard to intelligent cameras. The company’s products are worldwide; and as the CEO of the company pointed out, demand is climbing in the home monitoring cameras space. With strong management, great products, and an increasing demand, I couldn’t imagine a scenario where AMBA would fall for a long term period of time at the moment.
What Do You Think?
Where do you think AMBA is headed and why? Let us know in the comments below!