Brokerage firms on the sell-side which study Ambarella, Inc. (NASDAQ:AMBA) stock and where it might be headed, have a short-term consensus target price of $75 on the name. Analysts on the sell-side distribute research reports to the Buy-side in order to assist with institutional investment decisions. These reports however can also be obtained by retail investors through a number of different channels.
The most bullish analyst projection sees the stock reaching $86 within the next 12-18 months while the most conservative estimate stands at $50. The sell-side works to get the highest possible price for each stock while providing services in the form of ratings and analysis to the Buy-side.
These market makers issue reports on the stocks they cover and issue Buy, Sell and Hold ratings on the equities they cover. Institutions use these evaluate these recommendations when making strategic investment decisions. Breaking the ratings down, there are 4 Strong Buys, 1 Buys, 4 Hold, 0 Sell and 0 Strong Sell recommendations on the stock. Translating these recommendations into an integer based scaled yields a recommendation of 1.94. This is based on a 1-5 scale, 1 representing a Strong Buy and 5 a Strong Sell.
In addition to price targets, analysts pay particular attention to company earnings and projected earnings. For the upcoming quarter they are expecting that Ambarella, Inc. (NASDAQ:AMBA) will report earnings of $0.68 per share on or about 2016-12-01. This is the Zacks consensus based on the 6 analysts taken into consideration by the firm.
Earnings per share is arguably the most important indicator for a firm and the stock. Market analysts spend more time any other individual analyzing the well-being of a company and its earnings potential. Analysts typically have close ties with company senior management and have access to information that a normal retail investor would not have. It’s important to look at the consensus numbers as a whole in order to get a proper grasp of where the Street thinks the stock is headed. Analyst revisions of estimates leading up to an earnings report are also important indicators of how they well they think the company will perform heading into the quarterly earnings report.
Most recently Ambarella, Inc. (NASDAQ:AMBA) posted earnings of $0.25 versus the $0.16 Zacks estimate. This produced a surprise factor of $0.09 or a difference of 56.25%. A company that consistently outperforms expectations tends to see stock price increases over time. A firm that is accustomed to missing estimates can often see stock price declines.