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Pacific Crest: GoPro Checks Good News For Ambarella

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In a report published Wednesday, Pacific Crest analyst Brad Erickson maintained an Overweight rating on Ambarella Inc (NASDAQ: AMBA), while raising the price target from $78 to $96, following strong GoPro Inc (NASDAQ: GPRO) checks.

"Days of inventory declined m/m, and we believe sales run rates have increased recently, likely driven by incremental bundling with gift cards/memory cards, as well as a strong seasonal rebound associated with dads & grads," Erickson wrote.

The EPS estimates for 1Q16, 2Q16, 3Q16, 4Q16, FY16 and F2017 have been raised from $0.61 to $0.63, from $0.49 to $0.53, from $0.69 to $0.71, from $0.50 to $0.52, from $2.29 to $2.39 and from $3.24 to $3.29, respectively. The estimates have been raised to reflect "GoPro's beat and raise last quarter."

Market opportunity suggests that Ambarella could generate an EPS of $5 in 2018. Moreover, Erickson said that there could be a deal between the company and Qualcomm Inc (NASDAQ: QCOM), since such a deal "could make both technology and financial sense."

In the report Pacific Crest noted, "While we continue to like AMBA longer term on its unique exposure to a host of diversified growth drivers like China action cameras, IP video surveillance, police cameras and drones, the stock's recent run suggests expectations are very high going into next week's print. As such, we'd be opportunistic buyers on any pullback in the name."

Latest Ratings for AMBA

Sep 2017Canaccord GenuityMaintainsBuy
Sep 2017Deutsche BankMaintainsHold
Sep 2017Craig-HallumDowngradesBuyHold

View More Analyst Ratings for AMBA
View the Latest Analyst Ratings

Posted-In: Pacific CrestAnalyst Color Price Target Reiteration Analyst Ratings


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