Ambarella (AMBA) Guidance 'Only In-Line', Needham & Company Notes

Needham & Company analyst N. Quinn Bolton reiterated a Hold rating on Ambarella (NASDAQ: AMBA) following results and in-line guidance and weak wearable camera outlook.

Bolton commented, "AMBA reported better than expected F2Q16 results driven by strength in wearable, flying and automotive cameras. IP security cameras were flat Q/Q due to an inventory correction at a large Chinese customer but are expected to grow in F3Q16. However, management issued F3Q16 guidance that was only in line with expectations. We believe investors are likely to be disappointed with the in-line guidance but may be most concerned with the outlook for wearable camera revenue to decline both Q/Q and Y/Y in what is typically a seasonally strong quarter. Even with the 10% price decline in after-hours trading, AMBA is still trading at 24x our FY17 NG EPS estimate. We continue to believe the shares are fairly valued at such levels."

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Shares of Ambarella closed at $89.61 yesterday.

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