Ambarella Inc Shows Weakness in Key Financial Metrics

A report highlights Ambarella Inc's low score on essential investment criteria, indicating potential challenges in terms of profitability and growth, which could negatively impact stock performance in the semiconductor industry.

Date: 26-09-2024

AI Rating: 4

Ambarella Inc (AMBA) has received a rating of 40% based on the Price/Sales Investor model. This score indicates a concerning level of investment interest according to this strategy, which generally views scores below 80% as lacking appeal.

Several key financial metrics have been highlighted as failing:

Price/Sales Ratio: Marked as a FAIL, suggesting that the stock may be overpriced relative to its sales.
Long-Term EPS Growth Rate: This metric also FAILED, indicating insufficient earnings growth expectations over the long term, which may deter growth-focused investors.
Free Cash Per Share: Another FAIL, suggesting potential cash flow issues that could constrain the firm’s operational flexibility and ability to invest in future opportunities.
Three Year Average Net Profit Margin: Classified as a FAIL, reflecting ongoing profitability challenges.

On a positive note, AMBA managed to PASS in aspects like the Total Debt/Equity Ratio and Price/Research Ratio, which signals lower financial leverage and may suggest some level of financial stability relative to peers.

Overall, given the low score in the report and multiple failing grades in vital financial metrics, potential investors should approach Ambarella Inc with caution, as these factors may lead to a decline in stock prices or stagnation in performance.

Stocks: AMBA