AMBARELLA INC AMBA S
March 09, 2015 - 10:45am EST by
greenshoes93
2015 2016
Price: 66.00 EPS 1.85 1.59
Shares Out. (in M): 31 P/E 35.6 41.6
Market Cap (in M): 2,046 P/FCF 35.6 41.6
Net Debt (in M): -187 EBIT 68 58
TEV: 1,860 TEV/EBIT 27.3 31.9
Borrow Cost: Available 0-15% cost

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  • Semiconductor
  • Technology
  • Competitive Threats
 

Description

 

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.

Catalyst

Earnings declines from slowing end-markets, competition/GPRO dual sourcing

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    Description

     

    I do not hold a position with the issuer such as employment, directorship, or consultancy.
    I and/or others I advise hold a material investment in the issuer's securities.

    Catalyst

    Earnings declines from slowing end-markets, competition/GPRO dual sourcing

    Messages


    SubjectRisks
    Entry03/13/2015 07:32 AM
    MemberLTYC123

    Great write-up, thanks. Can you extrapolate a little more on risks associated with the ramping of new end-markets (quad-copters & wearables). Given threats in the core business, a full valuation, and the low likelyhood of new markets meaningfully contributing to earning, its difficult to imagine the stock roaring higher, but wanted to know your thoughts.   


    SubjectRe: Uncle?
    Entry06/08/2015 11:14 AM
    MemberLTYC123

    I would argue that the latest run ($80<) has been driven by retail investors who think they have locked in a sure thing after gaining approval from Cramer. Would be interested to hear greenshoes opinion, but people are assigning tons of value to drones with 70%< GMs.

    Some great quotes from Bloomberg social:"$AMBA is amazing...1 of my 5 muskateers so strong. add more to aother 4 while they r cheap." Or, "GPRO, AMBA, TASR. Its a hot sector that will be in for a very long ride. Drones, Cameras, Chips = Trifecta!"

    ...Dont think these guys care about the valuation. Correction will come, but will likely have to stomach some serious moves.

     

     

    Think this is a classic case of twice a silly price is still just silly.

     


    SubjectRe: Re: Uncle?
    Entry06/08/2015 06:11 PM
    MemberLTYC123

    Re Cramer - "Buy. Its not about fundamental valuation - its about momentum" just now on cnbc. This is a pure retail swing trade at this point. Buckle your seatbelts.

     

     


    SubjectUpdate
    Entry06/18/2015 10:49 AM
    MemberNovana

    Greenshoes,

    thanks for the write up. How did you get a breakdown by end market for AMBA? Company doesn't disclose any of it and IR (outsourced) is clueless. Good work though.

    Just wanted to share some of work we have done on this. The most interesting feedback we got was from Hikvision. They claim to be now #1 in security camera ahead of Axis / Dahua / Bosch so it should be good indicator. Overall feedback was very much in line with your findings:

    • Ambarella today is positioned similarly to TI (Texas Instruments) years ago when it was monopolistic SOC provider and attracted competition in the space. AMBA and Hi Silicon effectively killed TI
    • AMBA still growing strongly but less then Hi Silicon which is gaining market share at low end
    • ASP held up nicely so far because of incremental tech features. It'll be hard going forward to compensate inevitable price decline with further tech advancements because incremental benefit is too small
    • GoPro will suffer as Asian manufacturers are growing strongly at low end offering 90% capabilities of a GoPro at 1/3 of the cost. AMBA will need to lower prices to compete there

    Couple of questions:

    • On the drone front, which seems what is driving the market, do you have a sense as to potential market size there? Is there anyone else trying to enter this market where they seem to be dominating?
    • Dual sourcing timing at GoPro / DropCam / FLIR

    Tx in advance


    SubjectCitron chimes in
    Entry06/19/2015 12:43 PM
    MemberWeighingMachine

    http://www.citronresearch.com/wp-content/uploads/2015/06/AMBA-final-a.pdf

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