Ambarella Stock To $40?
Ambarella (AMBA) stock has fallen by 20.6% in less than a month, from $71.21 on 24th Feb, 2026 to $56.55 now. What comes next? We think that the stock could fall even more. The current correction, when put in context of our unattractive opinion of the stock, suggest the possibility of further downside. A price of $40 is not out of the question, especially considering that the stock has seen this level in the last 5 years. Read Buy or Sell Ambarella Stock to see how we arrive at this opinion.
So should you wait before buying this dip? Perhaps. There is no perfect way to time the dips. Nevertheless, here is another perspective on AMBA stock to help you make the decision. The bad news is that historically, the median return for the 12-month period following sharp dips was -9.1%, even though the median peak return was 61%. We define a “sharp dip” as a stock going down 30% or more in less than a 30-day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
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| Period | Past Median Return |
|---|---|
| 1M | -5.5% |
| 3M | 5.7% |
| 6M | 23.0% |
| 12M | -9.1% |
Historical Dip-Wise Details
AMBA had 7 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 61% median peak return within 1 year of dip event
- 253 days is the median time to peak return after a dip event
- -27% median max drawdown within 1 year of dip event
| 30 Day Dip | AMBA Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | AMBA | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | -9% | 61% | -27% | 253 | ||||
| 3042025 | -31% | -3% | 4% | 73% | -27% | 253 | ||
| 9122023 | -30% | -3% | -9% | 12% | -32% | 308 | ||
| 9222022 | -32% | -11% | -14% | 61% | -19% | 146 | ||
| 1202022 | -36% | -4% | -36% | 10% | -64% | 20 | ||
| 3122020 | -32% | -24% | 189% | 225% | -5% | 341 | ||
| 1152016 | -35% | -9% | 25% | 87% | -12% | 262 | ||
| 9022015 | -33% | -8% | -12% | 0% | -58% | 0 | ||
Ambarella Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 48.1% | Pass |
| Revenue Growth (3-Yr Avg) | 6.9% | Pass |
| Operating Cash Flow Margin (LTM) | 21.4% | Pass |
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