Boy have I been taken to the cleaners on Ambarella over the last few months. I’m down over a ? at today’s price. However, take a look at the price ranges below.
Qtr Qtr EPS QoQGr TTMEPS TTMGr Hi Lo Close P/E P/E Hi P/E Lo 1YrPeg
Oct 201104 0.19 $7.42 $5.55 $7.22
Jan 201201 0.04 $13.42 $7.42 $9.96
Apr 201202 0.07 $16.00 $9.04 $13.70
Jul 201203 0.19 0.49 $19.44 $12.94 $16.60 33.9 39.7 26.4
Oct 201204 0.25 31.6% 0.55 $7.42 $5.55 $7.22 13.1 13.5 10.1
Jan 201301 0.04 0.0% 0.55 $13.42 $7.42 $9.96 18.1 24.4 13.5
Apr 201302 0.16 128.6% 0.64 $16.00 $9.04 $13.70 21.4 25.0 14.1
Jul 201303 0.21 10.5% 0.66 34.7% $19.44 $12.94 $16.60 25.2 29.5 19.6 0.72
Oct 201304 0.30 20.0% 0.71 29.1% $22.67 $13.16 $20.55 28.9 31.9 18.5 0.99
Jan 201401 0.13 225.0% 0.80 45.5% $36.49 $19.55 $32.03 40.0 45.6 24.4 0.88
Apr 201402 0.17 6.3% 0.81 26.6% $35.38 $24.47 $24.85 30.7 43.7 30.2 1.15
Jul 201403 0.29 38.1% 0.89 34.8% $33.81 $21.60 $28.61 32.1 38.0 24.3 0.92
Oct 201404 0.57 90.0% 1.16 63.4% $46.78 $27.40 $44.29 38.2 40.3 23.6 0.60
Jan 201501 0.18 38.5% 1.21 51.3% $63.20 $44.20 $55.31 45.7 52.2 36.5 0.89
Apr 201502 0.56 229.4% 1.60 97.5% $77.39 $48.50 $73.15 45.7 48.4 30.3 0.47
Jul 201503 0.68 134.5% 1.99 123.6% $129.19 $70.39 $115.87 58.2 64.9 35.4 0.47
=====================================================================================================
Oct 201504 0.89 56.1% 2.31 99.1% $149.96 $54.56 $61.54 26.6 0.27
Jan 201601 0.64 255.6% 2.77 128.9% $179.83 $65.43 $61.54 22.2 0.17
Apr 201602 0.78 39.4% 2.99 86.9% $194.16 $70.65 $61.54 20.6 0.24
Jul 201603 0.95 39.4% 3.26 63.8% $211.57 $76.98 $61.54 18.9 0.30
Oct 201604 1.24 39.4% 3.61 56.3% $234.36 $85.27 $61.54 17.0 0.30
With today’s drop, many people are probably surprised at the depths to which the stock has fallen. However, on a historical value basis, there is still some room to drop. If Ambarella hits analyst expectations of $0.89 in its fourth quarter, which closes in October, the TTM earnings will be $2.31 and reflect a P/E of 26.6 at today’s price. The value was actually lower about a year ago, hitting 23.6 in the October 2014 quarter. Earnings are better now. But given the fear in the market, it’s logical to expect a high-flying tech company like Ambarella to get whacked.
That’s what makes this opportunity so interesting now. If Ambarella hits analyst expectations for the next fiscal year, it’s P/E at today’s price will be 17. Given the future growth prospects and historical value ranges, it’s a great opportunity to buy more shares in the company.
At $3.61 in earnings for next fiscal year, here is a look at the price and increase at various multiples:
20 25 30 35 40 45 50
$72 $90 $108 $126 $144 $162 $181
17% 47% 76% 105% 135% 164% 193%
It looks like revenues are increasing well, margins are improving and the future looks bright (I’ll post more once I do the analysis).
DJ