A week ago, Ambarella, Inc. (NASDAQ:AMBA) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. Ambarella beat expectations with revenues of US$285m arriving 2.1% ahead of forecasts. The company also reported a statutory loss of US$2.84, 7.1% smaller than was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Ambarella

Taking into account the latest results, the consensus forecast from Ambarella's 13 analysts is for revenues of US$333.5m in 2026. This reflects a solid 17% improvement in revenue compared to the last 12 months. The loss per share is expected to ameliorate slightly, reducing to US$2.71. Before this earnings announcement, the analysts had been modelling revenues of US$322.8m and losses of US$2.99 per share in 2026. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for both revenues and losses per share.

Despite these upgrades,the analysts have not made any major changes to their price target of US$93.64, implying that their latest estimates don't have a long term impact on what they think the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ambarella, with the most bullish analyst valuing it at US$110 and the most bearish at US$75.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ambarella shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Ambarella's growth to accelerate, with the forecast 17% annualised growth to the end of 2026 ranking favourably alongside historical growth of 1.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ambarella is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Ambarella going out to 2028, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Ambarella that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.