GoPro cameras contain Ambarella processors, and GoPro Inc. (NASDAQ: GPRO) produces a market-leading product. This arguably makes Ambarella that much more valuable because GoPro speaks for the quality of its processors, in turn attracting more clients and more sales for Ambarella. Also, Ambarella is inside the devices of GoPro’s competitors as well.
The boost from the most recent earnings report serves to solidify how valuable Ambarella is to GoPro’s model and how valuable it could be to that industry as a whole. Considering Ambarella’s unique processor and software technologies, analyst firms have anticipated that Ambarella could have a sustained leading market share in the range of 20% to 25% in core growth markets. Note that in this earnings report, revenues grew 61.9%, compared to the fourth quarter of the previous year.
Ambarella was maintained as Outperform and the price target was raised to $96.00 from $78.00 (versus an $87.20 close) at Pacific Crest. This call is based on two issues: solid GoPro orders and the possibility that Qualcomm might be interested in buying the company.
Ambarella stock has been an inspirational story, not just in 2015, but even farther back. So far in 2015, the stock price has gained about 86%, but if we look even farther back the stock has gained over 260% in just the past 52-weeks.
Shares of Ambarella were down about 2% at $92.68 on Tuesday morning. The stock has a consensus analyst price target of $80.91 and a 52-week trading range of $24.12 to $95.67.
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