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ZYBERNO

Stock Report

Updated Aug 30, 2026

AMBARELLA INC (AMBA)

Technology • NASDAQ

$70.63

Ambarella Inc. is an American fabless semiconductor company headquartered in Santa Clara, California, that designs AI vision system-on-chip (SoC) processors. The company's CVflow AI inference processors are used in security cameras, automotive ADAS systems, robotics, and edge AI applications, enabling real-time object detection, recognition, and tracking at low power consumption.

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

32.0/100

WEAK BUSINESS

AMBARELLA INC (AMBA) scores 32/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full AMBA quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

-100.0%

Overvalued

Growth gap unavailable — insufficient data for reverse DCF calculation.

⚠ Significant divergence between Owner Earnings and Free Cash Flow (0.82×). Intrinsic Value and Brina Gap may be meaningfully understated. Verify maintenance capex classification before acting.

🎯 Expected Annual Return →

-47.4%

Margin of Safety convergence — your return if the market re-prices to intrinsic value (5-yr annualised)

-1.7%

Yield + growth — what the business alone earns you, even if the market never re-rates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full AMBA valuation analysis · → View full AMBA Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-13.2%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.04x)

Operating Margin (Operational Efficiency):CRITICAL (-21.4%)

Return on Capital (Capital Efficiency):CRITICAL (-12.4%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

AMBARELLA INC (AMBA) stock report — Zyberno Score 32/100 (WEAK BUSINESS), Margin of Safety -100.0%, -47% expected annual return. Full financial analysis on Zyberno.

According to Zyberno's DCF model, AMBARELLA INC (AMBA) trades at $70.63 against an estimated intrinsic value per share of $2.85 — a -100.0% Margin of Safety based on Owner Earnings of $10.30M TTM, projected at -0.1% growth for 10 years with a 2.5% terminal growth rate. Zyberno's model translates this into a 5-year expected return of -47.4% annually.

Over the trailing twelve months, AMBA generated $10.30M in Owner Earnings. Capital was deployed as follows: $2.44M returned via share buybacks. Reinvestment rate: 16.1%. Owner Earnings have declined at 0.1% annually over the trailing five years using log-linear regression.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:70.63

Market Cap:$3.08B

Valuation Multiples (3)

P/B Ratio:5.08x

P/S Ratio:7.89x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$2.98B

Pfcf Ratio:53.10x

Price Action & Momentum (3)

12-1 Momentum:

+3.1% (71th pctile)

📈 Click to view full AMBA Momentum analysis →

Momentum Percentile:71 / 100

% of 52-Week High:73.0%

B. Profitability Assessment

Return Metrics (5)

ROE:

-13.2%

📊 Click to view full AMBA ROE analysis →

ROA:-10.5%

Roic:

-12.4%

📊 Click to view full AMBA ROIC analysis →

Reinvestment Rate:16.1%

Fundamental Growth Rate (g):-2.0%

Margin Analysis (3)

Operating Margin Ttm:-21.4%

Net Margin Ttm:-19.9%

Ebitda Margin:-17.4%

TTM Performance (3)

Gross Margin Ttm:59.2%

Operating Margin Ttm:-21.4%

Net Margin Ttm:-19.9%

Yield Metrics (3)

Earnings Yield:-$2.56

Owner Earnings Yield:$0.33

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.48

📊 Click to view full AMBA Earnings Surprise analysis →

EPS Surprise vs Expected:36.1%

Latest Earnings Filed:2026-06-02

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):2.9%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-1.6%

Operating Cash Flow Growth Rate (Linear):-1.5%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.43x

Quick Ratio:1.95x

Cash Ratio:0.69x

Leverage Analysis (3)

Debt To Equity Ttm:0.04x

Debt-to-Equity Ratio:0.04x

Debt To Ebitda:-999.00x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:238,229,000.00

Cash And Cash Equivalents:114,443,000.00

Long Term Debt:$10.91M

Net Debt:-$101.17M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $390.19M

Linear Growth: 2.9%

📊 Click to view full AMBA Revenue analysis & methodology →

Cost Of Revenue Ttm:$159.25M

Profitability Breakdown (2)

Gross profit TTM: $230.94M

Linear Growth: 1.4%

📊 Click to view full AMBA Gross Profit analysis & methodology →

-$83.51M

Bottom Line Performance (3)

-$77.52M

Income Before Tax:-$74.93M

Ebitda Ttm:-67,996,000.00

Operating Expenses (5)

Operating Expenses:314,453,000.00

R And D Expense:238,144,000.00

Sga Expense:76,309,000.00

Income Tax Expense:$2.59M

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:237.3%

Sga To Revenue Percentage:76.0%

Ebitda Margin:-17.4%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$794.84M

Current Assets:$405.19M

Ppe Net:45,889,000.00

Goodwill:303,625,000.00

Intangible Assets:$59.02M

Liability Structure (4)

Total Liabilities:189,020,000.00

Current Liabilities:166,960,000.00

Long Term Debt:$10.91M

Short Term Debt:$2.36M

Equity & Capital (3)

Equity:$605.82M

Retained Earnings:-$346.02M

Common Stock:200,000,000.00

Working Capital Items (3)

Accounts Receivable:39,175,000.00

Inventory:80,355,000.00

Accounts Payable:53,278,000.00

Special Items (2)

Contract Liabilities:17,036,000.00

Stock Based Compensation:21,893,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: $73.52M

Linear Growth: -1.5%

Free cash flow TTM: $58.01M

Linear Growth: -1.6%

📊 Click to view full AMBA Free Cash Flow analysis & methodology →

Investment Activities (1)

Investing Cash Flow:-$46.29M

Financing Activities (3)

Financing Cash Flow:-$4.66M

Dividends Paid Ttm:0.00

Stock Repurchase:2,441,000.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:15,515,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-1.81

-$1.81

Earnings Per Share Ttm:-$1.78

Revenue & Cash Per Share (2)

Sales Per Share Ttm:8.95

Operating Cash Flow Per Share:$1.69

Book Value & Capital (2)

Book Value Per Share:$13.89

Cash Per Share:2.62

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.53x

Working Capital Turnover Ttm:1.64x

Receivables Management (2)

Receivables Turnover Ttm:9.96x

Days Sales Outstanding Ttm:36.65

Inventory Management (2)

Inventory Turnover Ttm:1.98x

Days Inventory Outstanding Ttm:184.17

Payables & Cash Cycle (2)

Days Payable Outstanding:122.11

Cash Conversion Cycle:98.71

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:55.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $10.30M

Linear Growth: -9.3%

📊 Click to view full AMBA Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.24

Owner Earnings Yield:$0.33

Growth Assessment (1)

Owner Earnings Growth Rate:-$0.09

Damodaran Growth Analysis (2)

Reinvestment Rate:16.1%

Fundamental Growth Rate (g):-2.0%

Intrinsic Value Models (1)

Intrinsic Value:

$124.10M

📊 Click to view full AMBA DCF valuation →

Margin of Safety (1)

Margin Of Safety:

-100.0%

📊 Click to view full AMBA valuation analysis →

Return Scenarios (2)

Theoretical 5-Year Return:

-47.4%

📊 Click to view full AMBA expected return analysis →

Forward Expected Return (Yield + Growth):

-1.7%

📊 Click to view full AMBA expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):2.9%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-1.6%

Operating Cash Flow Growth Rate (Linear):-1.5%

Other Growth Rates (3)

Gross Profit Growth Rate (Linear):1.4%

Book Value Growth Rate (Linear):2.2%

Owner Earnings Growth Rate:-$0.09

C. Company Profile & Context

Corporate Information (6)

Symbol:AMBA

Company Name:AMBARELLA INC

Sector:Technology

Industry:Semiconductors

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:high

Volume Category:N/A

Share Structure (3)

Shares Outstanding:43.61M

Shares Outstanding Basic:43.61M

Shares Outstanding Diluted:43.61M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-30 22:28:00 UTC

Data Timestamp:2026-08-30T22:28:00.233296