Shares of Ambarella (AMBA 1.81%) have soared today, up by 13% as of 12:05 p.m. EST, after the company reported third-quarter earnings that topped expectations. Ambarella also issued strong guidance for the fourth quarter.
Revenue in the fiscal third quarter came in at $56.1 million, which was ahead of the $54.1 million that analysts were modeling for. That translated into adjusted net income of $3.3 million, or $0.09 per share, also topping the consensus estimate of $0.05 in adjusted profits. The vision processor technology company expanded adjusted gross margin from 58.1% a year ago to 62.7%.
"Our AI vision portfolio is well positioned for the megatrends around security, safety, and automation, and the pandemic appears to be accelerating the digital transformation," CEO Fermi Wang said in a statement. "We are announcing a significant automotive revenue funnel and providing a strong CV growth outlook."
Guidance for the fiscal fourth quarter, which ends Jan. 31, 2021, calls for revenue in the range of $56 million to $60 million, compared to the consensus estimate of $51.8 million. Adjusted gross margin is forecast at 59% to 61%, and adjusted operating expenses should be $31 million to $33 million.
Following the results, a slew of analysts increased price targets and/or upgraded the stock:
- Needham: Reiterated buy rating, increased price target from $63 to $80.
- Summit Insights: Upgraded from hold to buy.
- Stifel Nicolaus: Maintained buy rating, boosted price target from $66 to $78.
- Craig-Hallum: Reiterated buy rating, increased price target from $75 to $90.
- Morgan Stanley: Maintained overweight rating, boosted price target from $79 to $83.
- Roth Capital: Reiterated neutral rating, increased price target from $55 to $70.
- Rosenblatt: Kept buy rating, boosted price target from $65 to $82.