Analysts at Berenberg Bank provided their views on Ambarella, Inc. (NASDAQ:AMBA), emphasizing the negative impact of China lockdowns on the company’s near-term revenue growth.
While the company reported a Q1 EPS beat last week, Q2 revenue guidance was approximately 13% below the Street estimates due to China lockdowns as customers deferred orders given difficulty securing components on their end.
With pandemic-related uncertainty in China and related supply-chain issues lingering, the company expects just a gradual quarter-over-quarter improvement in H2.
The analysts now assume 5% sales growth in 2022 (versus 17% previously) and reduce their price target to $150 from $185, while maintaining their buy rating as they think Street estimates are now “de-risked” and its valuation offers favorable risk/reward on reasonable estimates.