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Ambarella (AMBA) to Report Q3 Earnings: What's in the Cards?

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·4 min read
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Ambarella Inc. AMBA is slated to report third-quarter fiscal 2022 results on Nov 30.

For the third quarter, Ambarella anticipates revenues between $88 million and $92 million. The Zacks Consensus Estimate for the same is pegged at $90.5 million, suggesting growth of 61.3% from the year-ago reported figure.

The Zacks Consensus Estimate for earnings stands at 49 cents per share, which indicates a whopping improvement of 444.4% from the year-ago quarter’s earnings of 9 cents per share.

For the quarter under review, Ambarella anticipates non-GAAP gross margin to be 61-63% approximately. Non-GAAP operating expenses are expected in the range of $36 million to $37.5 million.

The Santa-Clara based company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 57.6%.

Ambarella, Inc. Price and EPS Surprise

Ambarella, Inc. Price and EPS Surprise
Ambarella, Inc. Price and EPS Surprise

Ambarella, Inc. price-eps-surprise | Ambarella, Inc. Quote

Factors to Note

Ambarella’s fiscal third-quarter results are anticipated to reflect strong design wins and customer engagement with its artificial intelligence-enabled video-processing chips in the consumer security camera. The company is benefiting from solid momentum in CV2, CV22 and CV25. In fiscal 2020, these products generated production revenues from 1,000 customers.

Moreover, during the fiscal second quarter, Ambarella witnessed an increase in blended average selling price (ASP) on solid demand for CV SoC, which carries a higher ASP compared with non-CV solutions. The trend is likely to have sustained in the fiscal third quarter.

Automotive and internet of things cameras might have driven performance in the quarter to be reported. Although high supply chain costs may have persisted, favorable customer and product mix along with a stable pricing environment is likely to have aided gross-margin expansion beyond the high end of long-term estimate of 59-62%.

Nonetheless, tight chip supply from Samsung’s Texas and Austin foundries may have weighed on Ambarella’s sales growth in the quarter under review. Industry-wide component supply chain constraints are likely to have negatively impacted the company’s capability to meet its customers demand in the third quarter, consequently might have hurt overall sales.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Ambarella this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Ambarella currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Snowflake SNOW, Bank of Nova Scotia BNS and Lululemon Athletica LULU have the right combination of elements to post an earnings beat in their upcoming releases.

Snowflake has a Zacks Rank #3 and an Earnings ESP of +1.82%. The company is scheduled to report third-quarter fiscal 2022 results on Dec 1. Its earnings have surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average negative surprise being 2.5%.

The Zacks Consensus Estimate for Snowflake’s third-quarter bottom line is pegged at a loss of 6 cents per share, suggesting an improvement from the year-ago quarter’s loss of 28 cents. The consensus mark for revenues stands at $304 million, indicating year-over-year growth of 90.5%.

Bank of Nova Scotia has a Zacks Rank #3 and an Earnings ESP of +1.48%. The company is scheduled to report fourth-quarter 2021 results on Nov 30. Its earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.9%.

The Zacks Consensus Estimate for Bank of Nova Scotia’s fourth-quarter bottom line is pegged at $1.52 earnings per share, indicating year-over-year improvement of 38.2%. The consensus mark for revenues stands at $6.08 billion, suggesting year-over-year growth of 7.1%.

Lululemon is expected to report third-quarter fiscal 2022 results on Dec 9. The stock has a Zacks Rank #2 and an Earnings ESP of +1.44%. Lululemon’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.2%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.39 per share, suggesting year-over-year improvement of 19.8%. Its quarterly revenues are estimated to increase 28.1% year over year to $1.43 billion.


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