Ambarella (AMBA) Price Target Raised to Street High of $80 at FBN
FBN Securities maintained an Outperform rating on Ambarella (NASDAQ: AMBA) and raised its price target to a Street High of $80.00 (prior $70.00). Analyst Shebly Seyrafi called its Q4 a "blowout quarter."
Seyrafi thinks the company will benefit from continued strong ramp of GoPro (NASDAQ: GPRO) HERO4 sales and benefit incrementally from a new win with Xiaomi. Separately, he doesn't think Xiaomi is going to significantly hurt GoPro.
"The company reported a very strong FQ4/Jan. quarter, with revenue growth of 62% Y/Y (accelerating from 43% Y/Y growth in FQ3) that was broad-based. For example, we estimate that wearable/sports camera revenue grew by 87% Y/Y and IP security camera revenue grew by 86% Y/Y. In wearable/sports cameras, AMBA is benefiting from the continued strong ramp of GPRO’s HERO4 sales (note that GPRO’s total units grew by 68% Y/Y in CQ4 2014) while this segment will incrementally benefit from the new win with Xiaomi whereby AMBA will provide Xiaomi with its A7L SoC for that company’s new Yi Action Camera," said Seyrafi.
"By the way, we disagree with the bears on GPRO that Xiaomi is going to significantly hurt GPRO as GPRO derives only 10% of revenue from Asia, and we see Xiaomi as being primarily focused on China and Southeast Asia," continued the analyst.
Seyrafi added, "Note as well that AMBA is increasing its F2015 revenue growth guidance from 20-25% Y/Y before to 27-30% Y/Y, and this new guidance does not include much revenue from newer markets like drones and wearable police cameras, which we think could drive a few pp of additional growth."
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Shares of Ambarella closed at $63.05 yesterday.