Ambarella (AMBA) Is Down 21.8% After Guiding to FY 2027 Revenue Growth of 10%–15%

• In late February 2026, Ambarella, Inc. reported fourth-quarter sales of US$100.87 million and a net loss of US$16.44 million, alongside full-year sales of US$390.70 million and a reduced annual net loss of US$75.87 million compared with the prior year.
• Management also issued revenue guidance of US$97.00 million to US$103.00 million for the first quarter of fiscal 2027 and projected total revenue growth of 10% to 15% for fiscal 2027, underscoring ongoing demand for its Edge-AI system-on-chip products in automotive and security markets.
• Against this backdrop of higher sales and a narrower loss, we’ll now consider how Ambarella’s improved profitability trend could influence its investment narrative.

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Ambarella Investment Narrative Recap

To own Ambarella, you need to believe that demand for its Edge AI chips in automotive and security can eventually support sustainable profitability, not just revenue growth. The latest results show higher sales and a narrower loss, while guidance for fiscal 2027 points to continued top line progress. The key short term catalyst remains execution on these Edge AI ramps, while the biggest near term risk is that rising operating costs outpace revenue if design wins scale more slowly than expected. The new numbers do not remove that risk, but they do indicate incremental progress.

The most relevant update here is management’s guidance for 10% to 15% revenue growth in fiscal 2027, on top of US$390.70 million in sales for fiscal 2026. This guidance, together with the Q4 revenue of US$100.87 million, speaks directly to the core catalyst of expanding Edge AI deployments in automotive and security. It also provides a clearer yardstick for how quickly Ambarella needs to grow to justify its ongoing R&D spend and support a path toward improved margins.

Yet despite these improving sales trends, the continued net losses and reliance on volatile end markets are risks investors should be aware of...

Read the full narrative on Ambarella (it's free!)

Ambarella's narrative projects $526.3 million revenue and $74.3 million earnings by 2028. This requires 14.8% yearly revenue growth and a $162.9 million earnings increase from -$88.6 million today.

Uncover how Ambarella's forecasts yield a $97.45 fair value, a 76% upside to its current price.

Exploring Other Perspectives

Some of the lowest ranked analysts were already cautious, assuming only about US$490.0 million of revenue and no profitability by 2028, which is far more pessimistic than the baseline view and may shift again as this latest earnings and guidance are absorbed.

Explore 6 other fair value estimates on Ambarella - why the stock might be worth over 2x more than the current price!

The Verdict Is Yours

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Ambarella research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Ambarella research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ambarella's overall financial health at a glance.

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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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