Ambarella (NASDAQ:AMBA) Share Prices Have Dropped 53% In The Last Five Years

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example, after five long years the Ambarella, Inc. (NASDAQ:AMBA) share price is a whole 53% lower. That's an unpleasant experience for long term holders. Unfortunately the share price momentum is still quite negative, with prices down 13% in thirty days.

See our latest analysis for Ambarella

Ambarella isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Ambarella reduced its trailing twelve month revenue by 6.1% for each year. While far from catastrophic that is not good. The share price decline of 14% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Not that many investors like to invest in companies that are losing money and not growing revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Ambarella is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think Ambarella will earn in the future (free analyst consensus estimates)

A Different Perspective

Ambarella shareholders are up 4.3% for the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 14% endured over half a decade. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand Ambarella better, we need to consider many other factors. Take risks, for example - Ambarella has 3 warning signs we think you should be aware of.

Of course Ambarella may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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