Chardan Capital Markets Downgrades Ambarella (AMBA) to Sell
Chardan Capital Markets downgraded Ambarella (NASDAQ: AMBA) from Neutral to Sell with a price target of $40.00 (from $35.00).
Analyst Jay Srivatsa commented, "While we are impressed with Q3:15 results and Q4:15 guidance, we believe that the slower growth rate and lower gross margin guidance for FY:16 suggests that the future growth in revenues and earnings could be limited. We believe that increasing competition from HiSilicon in China remains the biggest risk for investors. As such, we would encourage investors to the sell the stock and wait for a better entry point on AMBA. Keeping fair value at 20x FY:16 earnings, our price target goes to $40.00."
The firm raised FY 2015 EPS from $1.44 to $1.77 and FY 2016 EPS from $1.75 to $2.00.
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Shares of Ambarella closed at $55.63 yesterday.