What's Going On With Ambarella Stock Today?

Ambarella, Inc AMBA shares are trading lower Wednesday after the company reported second-quarter results and issued weak guidance. Multiple analysts lowered price targets following the print. 

What Happened: Ambarella said second-quarter revenue fell 23% year-over-year to $62.12 million, which beat estimates of $62.05 million. The company reported a quarterly loss of 15 cents per share, which beat estimates for a loss of 21 cents per share.

"The near-term environment is very challenging, as customers are now more aggressively reducing their inventory, and we are now seeing some pockets of weak end-market demand, which further complicates our customers' efforts to reduce their inventory," said Fermi Wang, president and CEO of Ambarella.

"We anticipate our customers' inventory levels will normalize by the end of the year and set us up for a return to growth in the next fiscal year."

Ambarella sees third-quarter revenue of $50 million, plus or minus 4%, versus estimates of $67.6 million. Adjusted gross margin is expected to be between 62% and 64%.

See Also: ADP Report Reveals 177,000 Jobs Added In August, Missing Predictions

Analyst Assessment:

• Needham analyst Quinn Bolton maintained Ambarella with a Buy and lowered the price target from $100 to $90.
• Rosenblatt analyst Kevin Cassidy maintained Ambarella with a Buy and lowered the price target from $95 to $85.
• TD Cowen analyst Matthew Ramsay downgraded Ambarella from Outperform to Market Perform and lowered the price target from $90 to $65.

AMBA Price Action: Ambarella shares were down 20.2% at $60.45 at the time of publication, according to Benzinga Pro.

Photo: Lorenzo Cafaro from Pixabay.