Ambarella’s (AMBA, Financial) stock is up over 10% since I recommended buying last month. The company reported an upbeat quarterly result, pushing the stock up to $119. However, a recent bearish report on Ambarella pushed the stock down by roughly 25%. Citron compared the company’s gains to 3D printing stocks and set a $60 12-month price target, and a $40 $18-month price target.
Citron was already having a short position in Ambarella when it published the report, which is why I don’t find the company’s report credible. Unlike 3D Systems’ Ambarella has backed up the hype by reporting significant revenue and earnings growth. The company’s guidance for the upcoming quarter was also strong, and it is expected to venture into other markets. So, I think investors should ignore Citron’s bearish report and buy Ambarella at the current price.
Improved IP camera and wearable portfolio
Microsemi Corporation (MSCC, Financial), a leading supplier of semiconductor solutions differentiated by power, security, reliability and performance, detailed its new Timberwolf audio processor intended specially for Ambarella camera system-on-chips (SoCs). The modified technology from Microsemi is predicted to be the best-in-class high definition (HD) audio solution for Ambarella's set of video processors. The latest audio processor, Timberwolf is designed with AcuEdge Acoustic Technology on Microsemi's state-of-the-art Timberwolf digital signal processor (DSP) platform, which contains a set of complex, fully integrated algorithms that permits users to extract intelligible information from the audio environment in which they are connecting.
Microsemi's new ZL38AMB delivers license-free, royalty-free intelligent audio algorithms. The inclusive Microsemi AcuEdge package hastens customers' time-to-market with a corresponding reference design and easy-to-use development tools such as the MiTuner acoustic echo cancellation (AEC) tuning kit.
Microsemi’s second-generation family of audio processing solutions influences the offerings of the Microsemi AcuEdge acoustic technology, which conveys substantial features such as far field microphone up to 30 meters as well as direction of arrival, permitting for camera users to know where sounds are located. From now, manufacturers working on Ambarella-based IP and wearable camera designs can without difficulty integrate Microsemi’s leading edge audio solutions into their projects.
Wire free security cameras
Ambarella, a primary developer of low-power, HD and Ultra HD video compression and image processing semiconductors, stated availability of the S2Lm-based battery-powered IP camera reference project. The reference design permits quick development of a new generation of small, high-quality, battery-powered Full HD security cameras appropriate for both professional and consumer security purposes. The reference design is centered on Ambarella’s new S2Lm ultra low-power HD camera System-On-Chip (SoC), which can start recording Full HD 1080p30 video in less than 500ms from wake up, and delivers up to six months of battery life. A full-featured Linux Software Development Kit (SDK) is comprised for networking and client’s applications counting the cloud streaming and analytics.
Battery-powered IP cameras support new use cases that are related to a large section of the security camera market. With no cables to be concerned about, S2Lm-based cameras can be set up in places where getting to a power outlet may be problematic. In toting, these cameras can be moved everywhere for short-term monitoring, without the necessity to reinstall the camera after every move.
The Ambarella S2Lm reference design supports a feature set similar to that found on high-quality AC-powered IP cameras. Advanced image processing provides clear video in challenging lighting conditions, while Ambarella’s SmartAVCTM streaming technology delivers very low bit rates even for Full HD video streaming. The S2Lm SoC includes a powerful ARM® Cortex-A9 CPU to run customer applications including advanced analytics that minimize false motion notifications. Additionally, the SoC integrates on-chip de-warping of wide-angle lenses for cameras with a wide field of view. The Linux SDK includes reference implementations for low-power standby operation, wake-on-Wi-Fi and fast boot to Linux.
Conclusion
Ambarella has many opportunities going forward. The company has already reported strong numbers and expects good growth in the upcoming quarters. The security market camera possesses huge potential for Ambarella and I think comparing it to 3D printing stocks is unfair. The company also has the most number of patents in the industry and should bounce back soon. So, I think Ambarella is still a buy.
