# Ambarella (AMBA.US)

Canonical: https://gigainvestors.com/s/AMBA

Analysis as of: 2026-10-16T07:26:26.711Z. Financial observations: FY2010–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $63.35 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 4 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 9

- Operating margin variation: 0.82×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.08×

- FY2019: -0.18×

- FY2020: -0.22×

- FY2021: -0.27×

- FY2022: -0.09×

- FY2023: -0.22×

- FY2024: -0.68×

- FY2025: -0.44×

- FY2026: -0.21×

- LTM to Jul 2026: -0.14×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: -73.8%

- ROIC, second-lowest year: -293.1%

- Typical minus recent gross margin: 2.8 pp

- Typical gross margin (annual median): 60.7%

- Recent gross margin (lower of latest and 3-year median): 58.0%

- Years with nonpositive capital: 1

- Capital spending / revenue: 2.6%

- ROIC including acquisitions, ten-year median: -26.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: >100%

- FY2018: 36.0%

- FY2019: -91.3%

- FY2020: -145.9%

- FY2021: -266.9%

- FY2022: -27.8%

- FY2023: -56.3%

- FY2024: -293.1%

- FY2025: -782.1%

- FY2026: -10.7%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: -$406M

- Net income, five-year total: -$454M

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: -0.8 pp

- Working capital / revenue, final three-year average: 11.9%

Chart: Owner earnings · five years; fiscal year observations.

- FY2022: -$22M

- FY2023: -$61M

- FY2024: -$157M

- FY2025: -$101M

- FY2026: -$66M

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 36.0% vs -293.1%

- Per-share earnings: 1.68 to -2.84 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.4%

- Ordinary dilution, 5-year annual growth: 4.3%

- Market cap gain: $1.1B

- Cumulative retained earnings: -$570M

- Diluted shares, 10-year annual growth: 2.4%

- Diluted shares, 5-year annual growth: 4.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value change: -$4.52

- Per-share value, starting three-year median: $1.68

- Per-share value, ending three-year median: -$2.84

- Buybacks concentrated in cheaper years (correlation): 0.10

- Average buyback yield: 2.5%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: $346M

- Cumulative net income, 10 years: -$513M

- ROIC, first three-year median: 36.0%

- ROIC, last three-year median: -293.1%

Chart: Earnings per share; fiscal year observations.

- FY2017: $1.68

- FY2018: $0.55

- FY2019: -$0.93

- FY2020: -$1.35

- FY2021: -$1.72

- FY2022: -$0.72

- FY2023: -$1.70

- FY2024: -$4.25

- FY2025: -$2.84

- FY2026: -$1.78

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -18.7%

- Receivables to sales index (DSRI): 0.96×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 133.4%

- Earnings backed by cash: Yes

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.61×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -10.8%

- FY2018: -12.2%

- FY2019: -11.8%

- FY2020: -16.0%

- FY2021: -15.8%

- FY2022: -9.9%

- FY2023: -15.4%

- FY2024: -28.7%

- FY2025: -21.9%

- FY2026: -18.7%

## Holders

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 69% since Dec 2021 · sales +6.9%

Story as of 2026-10-16T09:58:17.464Z; price observation 2026-10-15.

- 2025-08-28: Ambarella Lifts 2026 Outlook on AI Surge ([nasdaq.com](https://www.nasdaq.com/articles/ambarella-lifts-2026-outlook-ai-surge))

- 2026-05-29: Ambarella's Q1 Earnings Meet Estimates, Revenues Rise on Auto Strength ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/ambarellas-q1-earnings-meet-estimates-140700679.html))

### Sales · FY2026–2027

sales +6.9%; source https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm; observed 2026-03-23.

- FY2018: $295M 

- FY2019: $228M 

- FY2020: $229M 

- FY2021: $223M 

- FY2022: $332M 

- FY2023: $338M 

- FY2024: $226M 

- FY2025: $285M 

- FY2026: $391M 

- FY2027: $418M 

### Gross margin · FY2026

gross margin 58%; source https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm; observed 2026-03-23.

- FY2017: 66.1% 

- FY2018: 63.6% 

- FY2019: 60.7% 

- FY2020: 58.0% 

- FY2021: 60.8% 

- FY2022: 62.7% 

- FY2023: 61.9% 

- FY2024: 60.4% 

- FY2025: 58.8% 

- FY2026: 58.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductor equipment & materials; annual sales are USD 390.7 million.

- Source: https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm (filed 2026-03-23); FY2026: revenue 390702000; grossProfit 226466000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AMBA.US: Ambarella, Inc. develops low-power system-on-a-chip, semiconductors, and software for edge and physical artificial intelligence, applications, and intelligent automation. The company's system-on-a-chip (SOC) integrates third generation CVflow technology with advanced video processing, image signal processing, audio processing, and system control functions on a single chip. It also offers central domain controllers, CVflow SoCs, AI neural processors, vision processor SoCs, high-definition radars, and serializer/deserializers, as well as licenses software modules. The company's solutions are used in automotive video recorders, electronic mirrors, front advanced driver assistance system camera, AI Telematics Systems, and cabin monitoring system and driver monitoring system cameras in automotive field; central domain controllers for autonomous vehicles in autonomy; enterprise and public class, and home security cameras in the field of IoT; and enterprise, home, public spaces, and consumer applications, as well as for video conferencing, access control, healthcare, medical, and virtual reality applications. It sells its solutions to original design manufacturers, original equipment manufacturers, automotive market, and Tier-1 suppliers through its direct sales force and distributors. The company operates in Taiwan, rest of the Asia Pacific, Europe, the United States, and rest of North America. Ambarella, Inc. was incorporated in 2004 and is headquartered in Santa Clara, California.

### Why customers stay

Margins ranged from 58% to 60.4% during 2024–26; it lost 73.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2024: grossProfit / revenue = 60.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2025: grossProfit / revenue = 58.8%.

- Source: https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm (filed 2026-03-23); FY2026: grossProfit / revenue = 58%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); 10-year return on capital observations [[2017,2.4698638040860126],[2018,0.3597238340258692],[2019,-0.9130414891487719],[2020,-1.4592324863276163],[2021,-2.6692338286471857],[2022,-0.27805381080728087],[2023,-0.5627829156913159],[2024,-2.931067261990494],[2025,-7.821228591538281],[2026,-0.10719131438417426]]; median -0.737912202420044. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 63% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm (filed 2026-03-23); Gross margin observations: [[2021,0.6079779362303243],[2022,0.6271756424473266],[2023,0.6188693328910031]]; range within 2 percentage points.

### Where the cash goes

Paid no dividends in 10 years; bought back USD 1 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2017: growth capex 0; upkeep 2701000; owner earnings 56694000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); FY2018: growth capex 0; upkeep 3687000; owner earnings 19935000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm (filed 2026-03-23); FY2026: cash repurchases 1000000 USD.

### Are managers owners

Insiders own 4.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); AMBA.US SharesStats.PercentInsiders = 4.3229999999999995 percentage points; cache date 2026-10-16.

### What could break it

Restrictions on exports to China could cut sales.

- Source: https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm (filed 2026-03-23); utor may cause disruptions in our shipments, which may adversely affect our operations and financial condition.

•

We are subject to risks associated with our distributors’ product inventories.

•

We rely on third parties to provide services and technology necessary for the operation of our business. Any failure of one or more of our vendors, suppliers or licensors to provide such services or technology could harm our business.

•

We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets, including China. In addition, our ability to sell certain products to certain China customers has been restricted.

•

We are subject to warranty and product liability claims and to product recalls.

•

We are subject to numerous laws and regulatory compliance requirements, including Section 404 of the Sarbanes-Oxley Act of 2002, which are costly to comply with, and our failure to comply with these requirements could harm our business and operating results.

•

Third parties’ assertions of infringement of their intellectual property rights could result in our having to incur significant costs and cause our operating results to suffer. Any potential dispute involving our intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

•

Climate change and climate change-related policies and regulations may have a long-term impact on our business.

Risks Related to Our Business and Our Industry

Global macroeconomic and political conditions, including high inflation, recessionary concerns, trade restrictions, geopolitical tensions and war, may adversely impact our business and financial condition in ways that we currently cannot predict.

We are a global company and our business, results of operations, and financial condition are impacted by global macroeconomic conditions. Macroeconomic events such as recession, high inflation, geopolitical tensions, war, public health crises, supply chain disruptions, rising energy costs, changes to U.S. trade policies and responses by foreign governments to such policies, and global banking concerns have caused economic volatility, which have in the past, and may continue to, harm our business. Economic volatility and adverse economic conditions have affected and may continue to affect the demand for our products and our customers’ products. Reduced demand for our customers’ products may negatively affect demand for our products and lead to a buildup of inventory at many of our customers, including their affiliates, partners, and contract manufacturers. Reduced demand for our products could result in decreases in our sales and materially harm our results of operations. The future effects of macroeconomic events on our business and results of operati

### What the price says

The price is 6.9 times annual sales; cash earnings are negative.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-23); Closing price 63.345 USD; reporting-to-trading FX 1; FY2026 annual sales per share 9.14900584278234; price multiple 6.923703087365818. FY2026 cash earnings/share -1.5405235892806328. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $61.37 per share

- 2016-11: $61.52 per share

- 2016-12: $54.13 per share

- 2017-01: $49.61 per share

- 2017-02: $58.95 per share

- 2017-03: $54.71 per share

- 2017-04: $56.22 per share

- 2017-05: $58.54 per share

- 2017-06: $48.55 per share

- 2017-07: $50.05 per share

- 2017-08: $54.40 per share

- 2017-09: $49.01 per share

- 2017-10: $56.44 per share

- 2017-11: $54.27 per share

- 2017-12: $58.75 per share

- 2018-01: $50.40 per share

- 2018-02: $48.08 per share

- 2018-03: $48.99 per share

- 2018-04: $46.59 per share

- 2018-05: $48.86 per share

- 2018-06: $38.61 per share

- 2018-07: $39.18 per share

- 2018-08: $38.31 per share

- 2018-09: $38.68 per share

- 2018-10: $34.78 per share

- 2018-11: $39.99 per share

- 2018-12: $34.98 per share

- 2019-01: $38.00 per share

- 2019-02: $40.37 per share

- 2019-03: $43.20 per share

- 2019-04: $50.12 per share

- 2019-05: $37.91 per share

- 2019-06: $44.13 per share

- 2019-07: $49.95 per share

- 2019-08: $55.87 per share

- 2019-09: $62.84 per share

- 2019-10: $52.63 per share

- 2019-11: $54.74 per share

- 2019-12: $60.56 per share

- 2020-01: $59.14 per share

- 2020-02: $59.45 per share

- 2020-03: $48.56 per share

- 2020-04: $52.58 per share

- 2020-05: $56.74 per share

- 2020-06: $45.80 per share

- 2020-07: $45.28 per share

- 2020-08: $52.70 per share

- 2020-09: $52.18 per share

- 2020-10: $54.67 per share

- 2020-11: $78.13 per share

- 2020-12: $91.82 per share

- 2021-01: $94.36 per share

- 2021-02: $112.49 per share

- 2021-03: $100.39 per share

- 2021-04: $97.49 per share

- 2021-05: $100.38 per share

- 2021-06: $106.63 per share

- 2021-07: $98.49 per share

- 2021-08: $103.57 per share

- 2021-09: $155.74 per share

- 2021-10: $185.83 per share

- 2021-11: $179.52 per share

- 2021-12: $202.89 per share

- 2022-01: $140.15 per share

- 2022-02: $139.71 per share

- 2022-03: $104.92 per share

- 2022-04: $82.08 per share

- 2022-05: $85.22 per share

- 2022-06: $65.46 per share

- 2022-07: $86.55 per share

- 2022-08: $67.88 per share

- 2022-09: $56.18 per share

- 2022-10: $54.73 per share

- 2022-11: $74.20 per share

- 2022-12: $82.23 per share

- 2023-01: $89.84 per share

- 2023-02: $94.31 per share

- 2023-03: $77.42 per share

- 2023-04: $61.98 per share

- 2023-05: $72.32 per share

- 2023-06: $83.67 per share

- 2023-07: $83.42 per share

- 2023-08: $62.15 per share

- 2023-09: $53.03 per share

- 2023-10: $44.99 per share

- 2023-11: $58.71 per share

- 2023-12: $61.29 per share

- 2024-01: $52.56 per share

- 2024-02: $55.85 per share

- 2024-03: $50.77 per share

- 2024-04: $45.97 per share

- 2024-05: $58.26 per share

- 2024-06: $53.95 per share

- 2024-07: $52.64 per share

- 2024-08: $59.70 per share

- 2024-09: $56.41 per share

- 2024-10: $56.19 per share

- 2024-11: $71.55 per share

- 2024-12: $72.74 per share

- 2025-01: $76.72 per share

- 2025-02: $61.43 per share

- 2025-03: $50.33 per share

- 2025-04: $47.99 per share

- 2025-05: $52.64 per share

- 2025-06: $66.07 per share

- 2025-07: $66.09 per share

- 2025-08: $82.48 per share

- 2025-09: $82.52 per share

- 2025-10: $85.23 per share

- 2025-11: $74.18 per share

- 2025-12: $70.84 per share

- 2026-01: $64.04 per share

- 2026-02: $60.34 per share

- 2026-03: $51.48 per share

- 2026-04: $68.80 per share

- 2026-05: $72.18 per share

- 2026-06: $85.80 per share

- 2026-07: $86.00 per share

- 2026-08: $69.38 per share

- 2026-09: $69.51 per share

- 2026-10: $63.35 per share

## Annual estimated value (USD per share)

- FY2017: low $29.68 per share, central $32.17 per share, high $35.48 per share

- FY2018: low $29.45 per share, central $31.81 per share, high $34.94 per share

- FY2019: low $24.74 per share, central $26.65 per share, high $29.21 per share

- FY2020: low $17.20 per share, central $17.90 per share, high $18.83 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1280263/000119312526119321/amba-20260131.htm); period 2026-01-31, filed 2026-03-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.