Chardan: Vislab Won't Give Ambarella Material Revenue Until 2017

Chardan's Managing Director of Equity Research, Jay Srivatsa, said in a note today that Ambarella Inc's AMBA acquisition of Vislab extends the company's "available market," but will not bring in "material product revenues" until 2017. Srivatsa said that it may take 18 to 24 months before the company can integrate Vislab's technology into its current solutions.

Ambarella paid $30 million in cash to acquire Vislab, a company that "developed computer vision and intelligent control systems for automotive and other commercial applications." Srivatsa said that Ambarella's "success may come from the enhancements that computer vision offers" its existing solutions in the IP security, wearable and flying camera markets.

Chardan said that Ambarella is "fairly valued" at current prices, though it reaffirmed a 12-month price target of $90, roughly 10 percent below the $101 price the stock is currently trading at. The firm said it remains "cautious on future upside for investors," an outlook that prompts them to "stay away from upgrading the stock to a Buy rating near term."

Recently, Ambarella has hit a rough patch – falling from highs above $128 to $100. However, year to date, the stock is up sharply, rising nearly 100 percent in the first half of 2015.