Ambarella Story

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AMBA -- USA Stock  

USD 76.51  10.14  15.28%

Ambarella is scheduled to announce its earnings today. The next earnings report is expected on the 23rd of November 2020. The stock is undergoing an active upward rally. Ambarella Free Cash Flow is projected to increase significantly based on the last few years of reporting. The past year's Free Cash Flow was at 37.59 Million. The current year Invested Capital is expected to grow to about 224.6 M, whereas Average Assets are forecasted to decline to about 453.3 M. As many passive investors are finally getting excited about technology space, Ambarella could be a good starting point. Let's analyze the possibilities of Ambarella maintaining its debt level in October.
Published over two months ago
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How much will Ambarella owe in October?
The company currently holds 9.49 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the entity is not taking enough advantage from borrowing. Ambarella has a current ratio of 8.73, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Ambarella financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Ambarella, including all of Ambarella's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Ambarella assets, the company is considered highly leveraged. Understanding the composition and structure of overall Ambarella debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Ambarella Total Debt

Ambarella liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Ambarella has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Ambarella balance sheet include debt obligations and money owed to different Ambarella vendors, workers, and loan providers. Below is the chart of Ambarella main long-term debt accounts currently reported on its balance sheet.
You can use Ambarella financial leverage analysis tool to get a better grip on understanding its financial position

How important is Ambarella's Liquidity

Ambarella financial leverage refers to using borrowed capital as a funding source to finance Ambarella ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ambarella financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Ambarella's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Ambarella, but it might be worth checking our own buy vs. sell analysis

Exercise or conversion by Leslie Kohn of 10000 shares of Ambarella subject to Rule 16b-3

Legal trades by Ambarella insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Ambarella insider trading alert for exercise of non-qualified stock option (right to buy) by Leslie Kohn, Chief Technology Officer, on 18th of November 2020. This event was filed by Ambarella Inc with SEC on 2020-11-18. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper Perspective

The entity reported the previous year's revenue of 236.19 M. Net Loss for the year was (42.94 M) with profit before overhead, payroll, taxes, and interest of 132.71 M.

Asset Breakdown

82.1 M
Assets Non Current
Goodwill
406.3 M
Current Assets
Total Assets463.69 Million
Current Assets406.28 Million
Assets Non Current82.09 Million
Goodwill38.73 Million
Tax Assets8.27 Million

Ambarella implied volatility may change after the rise

Potential upside is down to 4.92. It may suggest a possible volatility slip. Ambarella exhibits very low volatility with skewness of -1.05 and kurtosis of 5.05. However, we advise investors to further study Ambarella technical indicators to make sure all market info is available and is reliable.

Our Takeaway on Ambarella Investment

Whereas other entities under the semiconductor equipment & materials industry are still a bit expensive, Ambarella may offer a potential longer-term growth to investors. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to drop some or all of your Ambarella holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Ambarella.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Ambarella. Please refer to our Terms of Use for any information regarding our disclosure principles.

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