Should You Buy Ambarella at a 52-Week Low?

Should You Buy Ambarella at a 52-Week Low?

It's been a brutal year for Ambarella (NASDAQ: AMBA) investors. The chipmaker's stock plunged nearly 40% over the past 12 months, and currently hovers near a 52-week low. But investors looking at Ambarella's top and bottom line growth might initially be baffled since it posted positive year-over-year revenue growth over the past four quarters while beating analyst estimates on the top and bottom lines.

But looking ahead, analysts expect Ambarella's revenue and non-GAAP earnings to respectively fall 5% and 35% this year -- compared to a 2% sales drop and 12% earnings decline last year. Those numbers look dismal for a stock that trades at 24 times earnings, which is higher than the industry average P/E of 23 for semiconductor equipment makers.

Source: Ambarella.

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Source: Fool.com