09-03-2016, 12:53 AM
They nailed it pre-earnings (see previous entry)
Prior to the report, my research suggested the image processing semiconductor would struggle to meet lofty market expectations. After all, the stock surged 100% off the lows and the company was still expected to report FY17 results below the prior year levels. A lot of the excitement built on an expected rebound in the action camera market where key customer GoPro will launch a new product soon. My prediction though held that despite good numbers and high expectations, Ambarella was unwilling or unable to ratchet up guidance for the rest of the fiscal year. The management team has to take a conservative approach when business is relying on the sell-through of product by a customer with a recent history of underwhelming the market. As such, the CFO made the following statement on the earnings call: But I think with that said, you noticed we are having a reasonably strong Q3, but we have not changed our guidance for the year. And I think until we see sell-through in most of these consumer markets, we are to stay conservative.
Ambarella: Beating Conservative Guidance Isn't Enough - Ambarella (NASDAQ:AMBA) | Seeking Alpha
The stock is off 7%, despite a huge earnings beat.