Computer-vision chipmaker Ambarella edged above Wall Street's targets for its fiscal first quarter but disappointed with its outlook. AMBA stock plummeted on Wednesday.
The Santa Clara, Calif.-based company late Tuesday said it lost an adjusted 15 cents a share on sales of $62.1 million in the quarter ended April 30. Analysts polled by FactSet had expected Ambarella to lose 20 cents a share on sales of $62 million. In the year-earlier period, Ambarella earned 44 cents a share on sales of $90.3 million.
For the current quarter, Ambarella predicted sales of $60 million to $64 million. The midpoint of $62 million was well below Wall Street's consensus estimate of $66.9 million for the fiscal second quarter ending July 31. In the year-ago period, Ambarella generated sales of $80.9 million.
"The cyclical headwinds persist and continue to pressure our financial results," Chief Executive Fermi Wang said in a news release. "But we are taking our inference AI strategy to the next level with our R&D investment focused on the build-out of our CV3 platform as well as new derivatives of our third-generation AI technology."
AMBA Stock Sinks After Report
On the stock market today, AMBA stock tumbled 11.8% to 72.32. During the regular session Tuesday, AMBA stock climbed 5.4% to close at 81.96.
Ambarella makes processors for computer vision systems and video surveillance cameras. Its products are used for video security, advanced driver-assistance systems, autonomous driving and robotic applications. Ambarella describes itself as "an edge AI semiconductor company."
KeyBanc Capital Markets analyst John Vinh downgraded AMBA stock to sector weight from overweight after the report. Ambarella has seen limited design win traction for its automotive computer-vision system outside of China, he said.
Susquehanna Financial Group analyst Christopher Rolland maintained his positive rating on AMBA stock with a price target of 85. He believes Ambarella could be acquired by a company looking to catch up in autonomous vehicles, robotics, or artificial intelligence.
AMBA stock ranks No. 15 out of 37 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has a middling IBD Composite Rating of 60 out of 99.
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