Ambarella Inc. Ordinary Shares (AMBA)

FairStock Score: 45/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett-and-Graham-style investor, I start with durable earning power and a margin of safety. Ambarella is a $2.8B market-cap chip and software company at $64.30 on 2026-10-13. The filed numbers show real progress: in fiscal Q2 2027, the quarter ended 2026-07-31, revenue was $108.1M and net loss was $6.7M, much better than fiscal Q2 2026, the quarter ended 2025-07-31, when revenue was $95.5M and net loss was $20.0M. In fiscal Q3 2026, the quarter ended 2025-10-31, revenue was $108.5M and net loss was $15.1M. For the full year fiscal 2026 ended 2026-01-31, revenue was $390.7M and net loss was $75.9M, versus fiscal 2025 revenue of $284.9M and net loss of $117.1M, and fiscal 2024 revenue of $226.5M and net loss of $169.4M. So sales are rising and losses are narrowing. The balance sheet is conservative: debt-to-equity is 0.02, and the FairStock-calculated Altman Z-Score is 10.52. But the income statement still fails my first test. FairStock shows ROE of -9.41%, ROCE of -5.23%, a P/B of 4.58, and a negative P/E of -49.46. Trailing free cash flow is only $9.7M, a 0.3% FCF yield. The Lynch category is none because the company lost money in each of the last four years. Paying 4.58 times book for a loss-maker with a 0.3% FCF yield is not obvious value. I would need evidence of durable profits and a strong competitive moat. Today Ambarella is a promising turnaround candidate, not a proven bargain.

In plain English: Ambarella makes low-power chips and software that help cameras and machines process video and AI close to the device. The business is growing sales and losing less money than before, but it has not made a yearly profit. At the 2026-10-13 close of $64.30, the stock looks expensive relative to those losses and to the small amount of cash the business produces.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2027 10-Q (period ended 2026-07-31) · fiscal Q1 2027 10-Q (period ended 2026-04-30) · fiscal Q3 2026 10-Q (period ended 2025-10-31) · fiscal Q2 2026 10-Q (period ended 2025-07-31) · FY2026 10-K (period ended 2026-01-31) · FY2025 10-K (period ended 2025-01-31) · FY2024 10-K (period ended 2024-01-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer