Ambarella (AMBA) Earnings Preview - Morgan Stanley

Morgan Stanley analyst Joseph Moore reiterated an Overweight rating on Ambarella (NASDAQ: AMBA) ahead of the company's earnings report Tuesday after the close.

The analyst stated "We expect another strong quarter, with Samsung foundry constraints still a factor, as computer vision starts to boost consumer surveillance." He went on to state "professional surveillance (roughly 40% of revenues) has started to adopt the company's computer vision solutions, driving 2x+ increase in content per camera, and driving improvement in market growth (as incorporating artificial intelligence boosts the value of the camera) as well as Ambarella's market position; while this progress was mitigated initially by slower penetration of the Chinese market, the company indicated last quarter that one of the 2 large Chinese customers, Dahua, had started to move to production with computer vision solutions (with HIKvision the lone holdout). We note that while this has already been relevant to AMBA's revenue growth, the trend has a long way to go - last year computer vision was only 4% of units, and about 10% of revenues, increasing to 10-12% of units (our estimate) and 25% of revenues this year. In 2h21, we should see the beginning of adoption of CV in consumer surveillance (20% of sales), with a win announced earlier in the year with Amazon Ring doorbell moving to production."

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

Shares of Ambarella closed at $102.43 yesterday.

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