Yahoo Finance Even after rising 7.6% this past week, Ambarella (NASDAQ:AMBA) shareholders are still down 69% over the past year
Even the best stock pickers will make plenty of bad investments. And there's no doubt that Ambarella, Inc. (NASDAQ:AMBA) stock has had a really bad year. To wit the share price is down 69% in that time. The silver lining (for longer term investors) is that the stock is still 4.7% higher than it was three years ago. Furthermore, it's down 32% in about a quarter. That's not much fun for holders.
The recent uptick of 7.6% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
Check out our latest analysis for Ambarella
Because Ambarella made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Ambarella grew its revenue by 32% over the last year. We think that is pretty nice growth. Unfortunately it seems investors wanted more, because the share price is down 69% in that time. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Ambarella
A Different Perspective
We regret to report that Ambarella shareholders are down 69% for the year. Unfortunately, that's worse than the broader market decline of 21%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.4% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Ambarella .
Ambarella is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. 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.
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