Chip-maker Ambarella (AMBA) is trading up 9% after reporting an earnings triple play after the close of trading last night. An earnings triple play occurs when a stock beats consensus EPS estimates, beats revenue estimates, and raises forward guidance. While EPS beat by 7 cents ($0.01 vs. -$0.07 est.), revenues managed to just barely beat by $180,000 ($47.2 million vs. $47.02 estimates). But…a beat is a beat.
Ambarella is certainly in the sweet spot of the semiconductor space it seems. The company was only founded 15 years ago in 2004, but its low-power/high def chips are key for tech products like video security, advanced driver assistance systems, fully autonomous driving, and robotics.
Bespoke Institutional subscribers have access to our popular Earnings Explorer tool. One of the sections of the tool allows you to search for individual stocks to see historical earnings results for the company. Below is a snapshot of AMBA pulled directly from the Earnings Explorer. As shown, AMBA has historically beaten EPS estimates 100% of the time since it went public in 2012. This quarter’s EPS beat was the company’s 27th in a row! Talk about consistency. In terms of sales, the company has a 96% beat rate, which means it has only missed sales estimates once in twenty-seven quarterly reports.
While AMBA has no problem beating EPS and sales estimates, it lowers guidance quite often. In just the last ten quarters, AMBA has lowered guidance eight times. Prior to this quarter, AMBA had lowered guidance for five quarters in a row. That’s what makes this quarter’s report so impressive. Instead of lowering guidance as the company usually does, it raised guidance this time around. This is only the second time that the company has raised guidance on a quarterly report since it went public. As highlighted in the table below, the last time AMBA raised guidance on November 30th, 2017, it opened higher by 8.5% and then continued to trade higher by another 5.3% from the open to the close. Its full-day change that day was +14.3%. Again, AMBA is set to gap higher at the open this morning by about 9%. Will the same trend of intraday buying that happened the last time AMBA raised guidance occur once again today? We’ll find out soon enough. Start a two-week free trial to Bespoke Institutional to unlock our Earnings Explorer tool and much more.
