Is Ambarella's Turnaround for Real?

Ambarella (NASDAQ: AMBA) investors celebrated after the company's third-quarter 2018 earnings performance turned out to be better than expected. Shares of the video processing chip specialist popped over 14% in a day as it met Wall Street's expectations on revenue and delivered a solid bottom-line beat.

But there's more to Ambarella's results than what meets the eye, and investors shouldn't get too excited about its latest quarterly report and guidance. Here's why.

Ambarella's revenue fell 11.4% year over year to $89.1 million in the latest quarter, in line with the company's guidance. But investors shouldn't forget that the chipmaker had reduced its full-year guidance back in September because of weak demand from several quarters.

Source: Fool.com