Analyst Estimates: Here's What Brokers Think Of Ambarella, Inc. (NASDAQ:AMBA) After Its Yearly Report

Ambarella, Inc. (NASDAQ:AMBA) defied analyst predictions to release its annual results, which were ahead of market expectations. Ambarella beat expectations with revenues of US$285m arriving 2.1% ahead of forecasts. The company also reported a statutory loss of US$2.84, 7.1% smaller than was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Ambarella

Taking into account the latest results, the consensus forecast from Ambarella's 13 analysts is for revenues of US$333.5m in 2026. This reflects a solid 17% improvement in revenue compared to the last 12 months. Losses are forecast to narrow 3.7% to US$2.71 per share. Before this earnings announcement, the analysts had been modelling revenues of US$322.8m and losses of US$2.99 per share in 2026. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.

Despite these upgrades,the analysts have not made any major changes to their price target of US$93.64, implying that their latest estimates don't have a long term impact on what they think the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Ambarella, with the most bullish analyst valuing it at US$110 and the most bearish at US$75.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Ambarella's growth to accelerate, with the forecast 17% annualised growth to the end of 2026 ranking favourably alongside historical growth of 1.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ambarella is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Ambarella will grow in line with the overall industry. The consensus price target held steady at US$93.64, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ambarella. Long-term earnings power is much more important than next year's profits. We have forecasts for Ambarella going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Ambarella you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.