Ambarella (AMBA) Reports First Quarter Loss, Top Revenue Estimates May 30, 2024

Ambarella (AMBA – Free Report showed a quarterly loss of $0.26 per share compared to the Zacks Consensus Estimate of a loss of $0.32. For comparison, a year ago the loss was $0.15 per share. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of 18.75%. A quarter ago, it was expected that this maker of video compression chips would post a loss of $0.33 per share when it actually produced a loss of $0.24, delivering a surprise of 27.27%.

The company has topped consensus EPS estimates four times over the last four quarters.

Ambarella, which belongs to the Zacks Electronics – Semiconductors industry, posted revenues of $54.47 million for the quarter ended April 2024, surpassing the Zacks Consensus Estimate by 0.80%. For comparison, revenues from the previous year amounted to $62.14 million. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Ambarella shares have lost about 19.8% since the beginning of the year compared to the S&P 500’s gain of 10.4%.

What’s next for Ambarella?

Even though Ambarella has underperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, Ambarella’s estimate revision trend is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is -$0.26 on revenue of $59.87M for the coming quarter and -$0.86 on revenue of $251.72M for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Electronics & Semiconductors industry is currently in the bottom 24% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

You on (SHADE – Free Report), another stock in the broader Zacks Computer and Technology sector, has not yet reported earnings for the quarter ended April 2024. The results are expected to be released on June 6.

The high-speed networking technology developer is expected to post quarterly earnings of $0.15 per share in its upcoming report, representing a year-over-year change of -79.7%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Ciena’s revenue is expected to be $896.62 million, down 20.8% from the year-ago quarter.

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