Image source: Ambarella.

Shares of Ambarella (NASDAQ:AMBA) have been getting slammed since GoPro's (NASDAQ:GPRO) growth prospects started to dim, but the provider of video compression and image processing semiconductors is holding up better than many expected in product categories outside wearable cameras.

Revenue in its latest quarter clocked in at $57.2 million, 20% below where it was a year earlier. This is the first time Ambarella has posted a year-over-year decline on the top line.

Margins contracted with adjusted earnings roughly cut in half to $0.34 a share. This may seem like a bad report, but keep in mind that GoPro, Ambarella's most prolific customer, recently reported a loss and a 50% decline in revenue during the same period. Analysts were holding out for Ambarella to perform worse than it ultimately did for the period. 

Learning to fly

Ambarella's weakness through its GoPro partner was partly offset by growth in home monitoring applications (it's a provider for Nest and other surveillance gear makers) and flying cameras (drones, drones, drones).

There's caution in its outlook, but it's tied mostly to a one-time event outside GoPro's general malaise. The mid-April earthquake in Jumamoto, Japan, disrupted Sony's (NYSE:SONY) ability to produce image sensors, slowing the ability of Ambarella customers to build cameras. Ambarella sees the Sony hiccup affecting demand for its chips through the next few quarters.

The longer-term outlook remains bright. Wearable cameras may or may not bounce back when GoPro rolls out Hero 5, but relying more on home monitoring cameras, drones, and dashboard cams isn't a bad thing. Ambarella continues to raise the bar with richer specs on its video solutions, and hopping off GoPro's coattails isn't a bad thing.

Eating its own cooking

Ambarella stock has gotten crushed over the past year. The shares have surrendered 64% of their value since peaking last summer, and that includes last week's pop. Ambarella is putting some of its money where its mouth is, declaring a $75 million share buyback plan. 

Even before GoPro strapped a rocket to its back, Ambarella has been a thinking investor's way to play the camera revolution. Consumer tastes may have moved on from wearable cameras, but Ambarella is still arming the companies making today cool and tomorrow cooler. From its presence in Xiaomi smartphones to a role in the ascending virtual-reality market, Ambarella has often been miscast as merely a play on GoPro. Yes, GoPro is the reason it's coming off its first year-over-year decline as a public company, but there are so many other catalysts to send the stock higher in the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.