What’s Behind Ambarella Stock’s 2x Outperformance Of The S&P Since 2018?

June 27th, 2022 by Trefis Team
AMBA: Ambarella logo
AMBA
Ambarella

Ambarella Inc. (NASDAQ: AMBA) stock price jumped more than 2x from $35 in 2018 end, to over $70 currently, primarily due to favorable changes in its P/S multiple and revenues. The company also witnessed a strong rise in revenue per share over this period, despite a substantial rise in the outstanding share count. This has enabled the stock to strongly outperform the S&P, which has risen around 55% in comparison over this period.

In our interactive dashboard, Why Ambarella Stock Moved: AMBA Stock Has Gained 108% Since 2018, we break down the factors behind this move.

(A) Ambarella’s Total Revenue has grown 55% from $227.8 million in FY 2019 to $352 million currently

  • Ambarella’s total revenue has risen strongly from $227.8 million in FY ’19 to $331.9 million in FY ’22 (AMBA’s fiscal year ends in January), and currently stands slightly higher at $352 million.
  • As of FY ’22, 63% of Ambarella’s sales come from Taiwan, with $209 million worth of products sold there in FY ’22.
  • The rest of Asia Pacific brought in almost 25% of the company’s sales in FY ’22, with other regions collectively making up the remaining 12%.
  • While total sales were roughly stagnant between FY ’19 and FY ’21, growth has taken off since, and FY ’22 sales stand almost 1.5x higher than FY ’21 sales.
  • For details about Ambarella revenues and comparison to peers, see Ambarella (AMBA) Revenue Comparison
Relevant Articles
  1. Will United Airlines Stock Continue To See Higher Levels After A 20% Rise Post Upbeat Q1?
  2. Up 8% This Year, Why Is Costco Stock Outperforming?
  3. Down 7% In A Day, Where Is Travelers Stock Headed?
  4. What’s Next For Johnson & Johnson Stock After Beating Q1 Earnings?
  5. Should You Pick UnitedHealth Stock At $480 After A Q1 Beat?
  6. American Express Stock Is Up 17% YTD, What To Expect From Q1?

(B) Revenue per share (RPS) increased 36% from $6.96 in FY ’19 to $9.43 currently

  • AMBA revenue rose from $227.8 million in FY ’19 to $352 million currently, while the outstanding share count increased from 32.7 million in FY ’19 to 37.3 million currently.
  • Due to this, RPS has risen from $6.96 in FY ’19 to $9.43 currently.

(C) Price-To-Sales (P/S) multiple for Ambarella rose from 5.5x in 2018-end to 32.6x by 2021 end, but has pulled back to 7.7x currently, still around 1.4x higher than its 2018 level

  • Due to AMBA’s stellar performance since 2018-end, its P/S multiple rose strongly from 5.5x in 2018-end to as high as 32.6x in 2021.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 7.7x.
  • For additional details about the company stock returns and comparison to peers, see Ambarella (AMBA) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jun 2022
MTD [1]		 2022
YTD [1]		 2017-22
Total [2]
 AMBA Return -15% -64% 35%
 S&P 500 Return 0% -18% 84%
 Trefis Multi-Strategy Portfolio -2% -21% 211%

[1] Month-to-date and year-to-date as of 6/26/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates