Ambarella Inc. (NASDAQ: AMBA) stock price soared almost 2x from $35 in 2018 end to $68 currently, primarily due to favorable changes in its P/S multiple and revenues. Additionally, the company, a fabless semiconductor design company, witnessed a rise in revenue per share over this period, despite a rise in the outstanding share count. Due to this, the stock has managed to outperform the S&P, which returned roughly 55% over this period.
In our interactive dashboard, Why Ambarella Stock Moved: AMBA Stock Has Gained 95% Since 2018, we break down the factors behind this move.
(A) AMBA’s Total Revenue has grown 55% from $227.8 million in FY 2019 to around $352 million on an LTM basis
- AMBA’s total revenue first dropped from $227.8 million in FY ’19 to $223 million in FY ’21, before bouncing back strongly to $331.9 million in FY ’22, and currently stands even higher at $352 million (AMBA’s fiscal year ends in January).
- Despite weak numbers in FY ’20 and FY ’21, the company’s recent jump in sales means that revenue numbers now stand 55% higher than its FY ’19 levels.
- As of FY ’22, 63% of AMBA’s sales come from Taiwan, with the rest of Asia Pacific bringing in 25%. The remaining 12% comes from Europe and North America.
- For details about AMBA revenues and comparison to peers, see Ambarella (AMBA) Revenue Comparison
(B) Revenue per share (RPS) increased 36% from $6.96 in FY 2019 to $9.43 currently
- AMBA revenue rose from $227.8 million in 2019 to $352 million currently, while the outstanding share count increased from 32.7 million in 2019 to a little over 37 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 AMBA surged from 5.5x in 2018 end to 7.4x by 2022 end, and currently stands at 7.2x, still around 30% higher than its 2018 level
- Despite AMBA’s weak performance between FY 2019 to 2021, its P/S multiple rose strongly from 5.5x in 2018 to over 30x in 2021, on the back of rising investor expectations surrounding a jump in demand for the company’s products.
- However, due to current geopolitical tensions and the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 7.2x.
- For additional details about the company stock returns and comparison to peers, see Ambarella (AMBA) Stock Return Comparison.
|S&P 500 Return||1%||-20%||71%|
|Trefis Multi-Strategy Portfolio||3%||-21%||214%|
 Month-to-date and year-to-date as of 7/17/2022
 Cumulative total returns since the end of 2016