Skip to main content

Market Overview

Oppenheimer: For Ambarella, The Bear Thesis No Longer Applies

Oppenheimer: For Ambarella, The Bear Thesis No Longer Applies

In the past one- and two-year periods, Ambarella Inc (NASDAQ: AMBA) underperformed most major indices, but this may change in 2018, according to one Wall Street analyst.

The Analyst

Oppenheimer's Andrew Uerkwitz upgraded Ambarella's stock rating from Perform to Outperform with a new $70 price target.

The Thesis

The bearish case for avoiding Ambarella's stock over the past two years was straightforward, Uerkwitz said in the upgrade note. (See the analyst's track record here.)

The company was over-reliant on two main customers, GoPro Inc (NASDAQ: GPRO) and China's DJI, he said.

The customer concentration risk resulted in earnings per share declines as the action camera market intensified immensely, Uerkwtiz said. 

Today these risks are "behind investors," especially given Ambarella's shift away from action camera and drone components toward a computer vision-based company, Uerkwitz said.

Ambarella's opportunity in CV spans from basic object recognition to level five self-driving vehicles, he said. The company is merely in the beginning stages of a broad CV portfolio that will start to generate a mid-single digit revenue contribution by fiscal 2020, the analyst said. 

But beyond CV, the demand for Ambarella's core dedicated video and image processing solutions remains "intact and robust," Uerkwitz said. The largest market, security cameras, remains strong and the company is unlikely to lose any market share, while expectations within the more volatile segments like drones and cameras have now been "adequately reset," he said. 

"One of our primary focuses for 2018 will be in computer vision," Uerkwitz said. "And we see AMBA as the best pure play on this theme."

Price Action

Shares of Ambarella were up 5.69 percent at $65.87 at the time of publication. 

Related Links:

GoPro Weakness Weighs On Ambarella Outlook

Morgan Stanley Calls For 150% Upside In Ambarella

Latest Ratings for AMBA

Feb 2021Deutsche BankMaintainsHold
Jan 2021Roth CapitalUpgradesNeutralBuy
Jan 2021Roth CapitalMaintainsNeutral

View More Analyst Ratings for AMBA
View the Latest Analyst Ratings


Related Articles (AMBA)

View Comments and Join the Discussion!

Posted-In: Action Camera Andrew Uerkwitz Computer Vision DJIAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

FSRMorgan StanleyMaintains40.0
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at