Ambarella (AMBA): Drone Revenue Fails To Meet High Expectations - Stifel
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Stifel analyst, Kevin Cassidy, reiterated his Buy rating on shares of Ambarella (NASDAQ: AMBA) but cut his price target to $52 from $64 after better than expected IP Security and Automotive camera revenues made up for lower than expected demand for high end drones. The analyst noted that guidance includes ~$18mn from GoPro inventory replenishment and the novelty of consumer
drones is wearing off. Given weaker drone demand, management lowered the mid-point of full year FY18 y/y revenue decline to 5% from flat previously.
The analyst stated "We continue to expect that the drone market can be revitalized
with autonomous drones and see the Ambarella CV1 SoC as enabling this market. Based on the technical discussion provided by Ambarella CTO, Les Kohn, during the earnings conference call, we have confidence that the Ambarella team is on track for sampling CV1 in 4QC17 and end product launches starting in late 2018".
Shares of Ambarella closed at $54.40 yesterday.
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