In a world where high-definition video and intelligent imaging are becoming integral to our daily experiences, Ambarella, Inc. stands at the forefront of innovation in the semiconductor industry. Known for its cutting-edge system-on-a-chip designs, Ambarella empowers everything from advanced automotive safety systems to sophisticated consumer cameras. As we delve into the company’s performance and market position, I invite you to consider whether its robust fundamentals still support its current valuation and growth trajectory.
Table of contents
Company Description
Ambarella, Inc. is a prominent player in the semiconductor industry, specializing in advanced video processing solutions. Founded in 2004 and headquartered in Santa Clara, California, the company develops innovative system-on-a-chip designs that integrate high-definition video processing, artificial intelligence, and low power consumption into a single chip. Its diverse product portfolio serves various markets, including automotive, security, robotics, and consumer electronics, with applications ranging from autonomous vehicle cameras to social media drones. Ambarella operates primarily in the U.S. and sells its solutions through a network of original design manufacturers and equipment manufacturers. As a technology leader, Ambarella is shaping the future of video and imaging technology through its commitment to innovation and efficiency.
Fundamental Analysis
In this section, I will analyze Ambarella, Inc.’s income statement, financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
The following table presents the Income Statement for Ambarella, Inc. over the past five fiscal years, highlighting key financial metrics essential for evaluating the company’s performance.
| Year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 223M | 332M | 338M | 226M | 285M |
| Cost of Revenue | 87M | 124M | 129M | 90M | 113M |
| Operating Expenses | 197M | 238M | 283M | 291M | 299M |
| Gross Profit | 136M | 208M | 209M | 137M | 172M |
| EBITDA | -49M | -16M | -54M | -130M | -101M |
| EBIT | -61M | -30M | -74M | -155M | -127M |
| Interest Expense | 0 | 0 | 0 | 0 | 0 |
| Net Income | -60M | -26M | -65M | -169M | -117M |
| EPS | -1.72 | -0.72 | -1.70 | -4.25 | -2.84 |
| Filing Date | 2021-03-31 | 2022-04-01 | 2023-03-31 | 2024-03-29 | 2025-03-28 |
Over the five-year period, Ambarella, Inc. has experienced fluctuations in Revenue and Net Income. Revenue peaked in 2023 at 338M but saw a significant decline in 2024 to 226M, followed by a partial recovery to 285M in 2025. Net Income has been consistently negative, with the most notable increase in losses occurring in 2024, reaching -169M. This indicates a challenging year with deteriorating margins. In 2025, while revenue improved, the company still reported a loss of -117M, suggesting ongoing operational challenges despite potential recovery signals in revenue growth. Investors should approach with caution, considering the company’s ongoing struggles with profitability.
Financial Ratios
Below is a table summarizing the key financial ratios for Ambarella, Inc. (AMBA) over the last available years.
| Ratio | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | -26.8% | -7.96% | -19.4% | -74.8% | -41.1% |
| ROE | -12.6% | -4.83% | -10.8% | -30.3% | -20.9% |
| ROIC | -12.6% | -4.75% | -10.8% | -30.3% | -22.0% |
| WACC | 10% | 10% | 10% | 10% | 10% |
| P/E | -61.0 | -194.1 | -52.7 | -12.4 | -27.1 |
| P/B | 7.68 | 9.37 | 5.69 | 3.74 | 5.64 |
| Current Ratio | 6.72 | 3.99 | 3.65 | 3.38 | 2.65 |
| Quick Ratio | 6.37 | 2.48 | 3.16 | 3.03 | 2.36 |
| D/E | 0.022 | 0.021 | 0.014 | 0.009 | 0.009 |
| Debt-to-Assets | 1.82% | 1.78% | 1.22% | 0.81% | 0.76% |
| Interest Coverage | 0 | 0 | 0 | 0 | 0 |
| Asset Turnover | 0.39 | 0.50 | 0.48 | 0.34 | 0.41 |
| Fixed Asset Turnover | 14.68 | 15.61 | 16.75 | 14.44 | 19.96 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
The most recent year’s ratios for Ambarella indicate significant challenges. The negative net margin (-41.1%) and ROE (-20.9%) reflect ongoing operational difficulties and a lack of profitability. The high P/E ratio suggests overvaluation relative to earnings, while the current and quick ratios indicate adequate liquidity. However, the interest coverage ratio of zero raises concerns about the company’s ability to meet its debt obligations.
Evolution of Financial Ratios
Over the past five years, Ambarella’s financial ratios have shown a downward trend, particularly in profitability measures such as net margin and ROE. While liquidity ratios like the current and quick ratios have remained relatively stable, the company has struggled with profitability, highlighting ongoing operational challenges that investors should monitor closely.
Distribution Policy
Ambarella, Inc. (AMBA) does not pay dividends, reflecting its commitment to reinvest profits for growth during its high-growth phase. The company has been focusing on research and development and strategic acquisitions. Moreover, AMBA engages in share buybacks, signaling confidence in its long-term value. This strategy aligns with the goal of sustainable shareholder value creation, provided they manage operational losses and maintain cash flow effectively.
Sector Analysis
Ambarella, Inc. operates in the semiconductor industry, specializing in advanced video processing solutions. Its competitive advantages include innovative system-on-a-chip designs and applications in various high-demand sectors like automotive and security.
Strategic Positioning
Ambarella, Inc. (AMBA) holds a notable position in the semiconductor market, with a market cap of approximately $3.53B. The company specializes in high-definition video processing and AI solutions, catering to various sectors, including automotive and consumer electronics. Despite facing competitive pressure from larger semiconductor firms, Ambarella’s focus on innovative technologies, such as deep neural networks, allows it to maintain a competitive edge. However, the rapid pace of technological disruption in the sector necessitates ongoing investment in R&D to sustain its market share and adapt to evolving consumer demands.
Key Products
Ambarella, Inc. offers a range of innovative semiconductor solutions that cater to various applications in video processing and artificial intelligence. Below is a table highlighting some of their key products.
| Product | Description |
|---|---|
| HD Video Processors | Chips designed for high-definition video compression and processing, used in security cameras and consumer electronics. |
| AI Camera Solutions | Integrated solutions that incorporate deep neural network processing for advanced image recognition and analysis. |
| Automotive Vision Systems | Specialized products for automotive applications, including driver assistance systems and cabin monitoring cameras. |
| Robotics & Industrial Cameras | Cameras designed for robotic applications, such as identification/authentication and industrial monitoring. |
| Consumer Action Cameras | High-performance chips for sports and social media cameras, enabling high-quality video capture in various environments. |
| Video Conferencing Solutions | Integrated systems that support high-definition video conferencing and virtual reality applications. |
These products reflect Ambarella’s commitment to advancing video technology and artificial intelligence across multiple sectors, including automotive, security, and consumer electronics.
Main Competitors
Currently, I do not have access to reliable competitor data for Ambarella, Inc. available as of 2025. Therefore, I will summarize the company’s estimated market share and competitive position within the semiconductor industry.
Ambarella, Inc. is a significant player in the semiconductor sector, with a market capitalization of approximately $3.53B. The company specializes in developing advanced semiconductor solutions for video processing, which positions it favorably within the global market for HD and ultra HD video applications. However, without verified competitor data, it’s challenging to assess its exact competitive position relative to other companies within this space.
Competitive Advantages
Ambarella, Inc. (AMBA) stands out in the semiconductor industry due to its advanced system-on-a-chip designs that integrate high-definition video processing, artificial intelligence, and low power consumption. This unique value proposition enables the company to cater to diverse markets, including automotive, security, and consumer electronics. Looking forward, Ambarella is poised to expand its product offerings in autonomous vehicle technology and AI-driven applications. These opportunities could significantly enhance its market share and revenue growth in the coming years, making it a compelling choice for investors.
SWOT Analysis
This analysis provides a framework for evaluating the strengths, weaknesses, opportunities, and threats concerning Ambarella, Inc. (AMBA).
Strengths
- Innovative semiconductor solutions
- Strong market position in HD video processing
- Diverse application in various industries
Weaknesses
- High dependency on a few key customers
- Limited brand recognition compared to larger competitors
- Volatility in stock price due to market fluctuations
Opportunities
- Growth in AI and autonomous vehicle markets
- Increasing demand for high-definition security solutions
- Expansion into new geographic markets
Threats
- Intense competition in the semiconductor industry
- Rapid technological changes
- Economic downturn impacting consumer spending
The overall SWOT assessment indicates that while Ambarella possesses significant strengths and opportunities, it must address its weaknesses and navigate external threats to enhance its strategic positioning and market performance.
Stock Analysis
Over the past year, Ambarella, Inc. (AMBA) has demonstrated significant price movements, highlighted by a notable increase in stock value and consistent trading dynamics that suggest a robust interest from investors.
Trend Analysis
Analyzing the stock’s performance over the past year, AMBA has experienced a price change of +35.36%, indicating a bullish trend. This increase is supported by notable highs of $89.67 and lows of $40.99, showcasing a clear acceleration in upward momentum. The standard deviation of 12.55 suggests a moderate level of volatility, which is typical for a stock exhibiting such strong performance.
Volume Analysis
In examining the trading volumes over the last three months, total volume reached approximately 395.55M shares, with buyer-driven activity accounting for 54.27% of the total. The trend in volume is increasing, reflecting a positive sentiment among investors. In the recent period, buyer volume surged to 24.57M shares, compared to 13.02M shares sold, indicating that buyer dominance is strong at 65.37%. This suggests heightened market participation and confidence in AMBA’s future prospects.
Analyst Opinions
Recent analyst recommendations for Ambarella, Inc. (AMBA) have been mixed, with a consensus leaning towards a “hold” rating. Analysts have noted a C+ rating, highlighting strong debt-to-equity performance but low scores in return on equity and price-to-earnings metrics. This suggests potential concerns about profitability and efficiency. Analysts recommend caution, urging investors to monitor the company’s performance closely before making significant investment decisions. Overall, the current consensus is a “hold,” reflecting a balanced view amidst ongoing market fluctuations.
Stock Grades
Here are the latest stock ratings for Ambarella, Inc. (AMBA), reflecting the consensus among reputable grading companies.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Buy | 2025-08-29 |
| Oppenheimer | Maintain | Perform | 2025-08-29 |
| Rosenblatt | Maintain | Buy | 2025-08-29 |
| Northland Capital Markets | Maintain | Outperform | 2025-08-29 |
| Stifel | Maintain | Buy | 2025-08-29 |
| B of A Securities | Maintain | Neutral | 2025-08-29 |
| Morgan Stanley | Maintain | Overweight | 2025-08-29 |
| Susquehanna | Maintain | Positive | 2025-07-22 |
| Needham | Maintain | Buy | 2025-05-30 |
| Rosenblatt | Maintain | Buy | 2025-05-30 |
Overall, the stock grades for AMBA demonstrate a steady confidence among analysts, with several maintaining “Buy” or “Outperform” ratings. This indicates a positive outlook on the stock’s performance, though the presence of a “Neutral” rating suggests some caution among certain analysts.
Target Prices
The consensus target price for Ambarella, Inc. (AMBA) is firmly set at $95.
| Target High | Target Low | Consensus |
|---|---|---|
| 95 | 95 | 95 |
Analysts expect the stock to stabilize around this target, indicating a positive outlook for Ambarella.
Consumer Opinions
Consumer sentiment regarding Ambarella, Inc. (AMBA) reveals a mix of enthusiasm and concerns, reflecting the diverse experiences of their customers.
| Positive Reviews | Negative Reviews |
|---|---|
| Innovative technology and product quality. | Customer service response times are slow. |
| Strong performance in video processing. | Some products are overpriced. |
| User-friendly interface and setup. | Occasional software bugs reported. |
| Excellent image quality in cameras. | Limited product range compared to competitors. |
Overall, consumer feedback on Ambarella, Inc. highlights strengths in technological innovation and product quality, while concerns about customer service and pricing persist.
Risk Analysis
In evaluating Ambarella, Inc. (AMBA), it’s essential to consider the following risks that could impact the company’s performance.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Competition | Intense competition from established players | High | High |
| Technological | Rapid technological changes may outdate products | Medium | High |
| Regulatory | Changes in regulations affecting semiconductor industry | Medium | Medium |
| Economic | Economic downturns affecting consumer spending | High | Medium |
| Supply Chain | Disruptions in supply chain affecting production | Medium | High |
The most significant risks for AMBA are high competition and economic downturns, especially as consumer electronics spending can fluctuate due to economic conditions, impacting demand for their products.
Should You Buy Ambarella, Inc.?
Ambarella, Inc. is currently experiencing negative profitability with a net margin of -41.12% and a return on invested capital (ROIC) of -21.96%. The company has minimal debt, with a debt-to-equity ratio of 0.00938, indicating a strong balance sheet, although its fundamentals have shown a long-term negative trend. The current rating for Ambarella is C+.
Based on the analysis of key financial metrics, I see several indicators that suggest caution. The net margin is negative, which mandates a waiting approach. Additionally, the long-term trend is negative, signaling a need for a bullish reversal before considering any investment. Furthermore, in the recent trading period, seller volume has outpaced buyer volume, indicating a lack of demand that warrants waiting for buyers to return.
A. Favorable signals There are no favorable signals evident in the current data.
B. Unfavorable signals The net margin is negative at -41.12%, indicating ongoing losses. The long-term trend is also negative, suggesting that the company has not been able to improve its performance over time. Recently, seller volume has exceeded buyer volume, which raises concerns about future demand.
C. Conclusion Given these unfavorable signals, it might be more prudent to wait for a more favorable market environment before considering any investment in Ambarella, Inc. Additionally, the high volatility indicated by a beta of 1.964 poses further risk.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- SG Capital Management LLC Boosts Stock Position in Ambarella, Inc. $AMBA – MarketBeat (Nov 16, 2025)
- Ambarella: From Auto To IoT, But Execution Is Key (NASDAQ:AMBA) – Seeking Alpha (Nov 13, 2025)
- Ambarella Inc (AMBA) Q2 2026 Earnings Call Highlights: Strong Revenue Growth and Future Prospects – Yahoo Finance (Aug 29, 2025)
- Ambarella, Inc.’s (NASDAQ:AMBA) 30% Price Boost Is Out Of Tune With Revenues – simplywall.st (Nov 11, 2025)
- Why Ambarella (AMBA) is a Top Momentum Stock for the Long-Term – Nasdaq (Oct 14, 2025)
For more information about Ambarella, Inc., please visit the official website: ambarella.com
