AMBA: Edge AI Demand Will Drive Multi Year Expansion Trajectory Forward

Analysts have modestly increased their price target on Ambarella, raising fair value by approximately 0.00 dollars to about 98.09 dollars per share. This reflects a slightly improved profit margin outlook that offsets a marginally lower future price to earnings multiple.

What's in the News

• Ambarella issued new fourth quarter fiscal 2026 guidance, projecting revenue between 97.0 million dollars and 103.0 million dollars, signaling solid near term demand visibility (company guidance).
• The company raised its full year fiscal 2026 revenue growth outlook to a range of 36 percent to 38 percent, up from a prior estimate of 31 percent to 35 percent, positioning the year for a potential all time revenue record (company guidance).
• The updated growth targets imply accelerating momentum across Ambarella's core video and AI semiconductor markets and reinforce investor optimism about its multi year expansion trajectory (company guidance).

Valuation Changes

• The fair value estimate has remained essentially unchanged at approximately 98.09 dollars per share, indicating no material reassessment of intrinsic value.
• The discount rate has risen slightly from about 10.42 percent to roughly 10.43 percent, reflecting a marginally higher implied risk profile or cost of capital.
• The revenue growth assumption has stayed effectively flat at around 14.59 percent, suggesting no change in the long term top line outlook.
• The net profit margin has risen slightly from about 14.17 percent to roughly 14.69 percent, signaling modestly improved long term profitability expectations.
• The future P/E multiple has fallen slightly from approximately 76.22 times to about 75.11 times, implying a small reduction in the valuation multiple applied to Ambarella's earnings.