Chardan Capital Boosts PT on Ambarella (AMBA) to $90; Stock Continues Defying Conventional Wisdom

Chardan Capital lifts its price target on Ambarella, Inc. (Nasdaq: AMBA) from $70 up to $90 and affirms a Neutral rating on the stock following Q1 results and guidance.

Analyst Jay Srivatsa commented, AMBA stock has simply defied conventional valuation metrics even as AMBA management has continued to execute flawlessly. Having expanded its customer base beyond GoPro to Xiomi and now getting meaningful traction in the drone market with increasing opportunities emerging in consumer security markets even as its core IP camera market remains robust, AMBA is clearly on a roll with rising revenues and earnings growth. While higher inventories and declining margin profile is concerning, the only reason for us staying with a Neutral rating is valuation. Given the run up in the stock over the past 12 months and relative valuation, we remain cautious on future upside for investors prompting us to stay from upgrading the stock to a Buy rating near term. With our street high estimate of $3.62 for FY:17, the stock is trading at 27x FY:17 earnings and 33x FY:17 earnings on consensus estimate.

For an analyst ratings summary and ratings history on Ambarella click here. For more ratings news on Ambarella click here.

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