Ambarella Stock Eyes Key Trendline After Upgrade

The equity is down over 17% this year, however

Digital Content Manager
Sep 18, 2020 at 10:57 AM
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The shares of Ambarella Inc (NASDAQ:AMBA) are up 3.6% at $54.06 at last check, after Berenberg initiated coverage of the equity with a "buy" rating as well as a $67 price target. The analyst in coverage noted that while shares recently reflected concerns over revenue impact in non-focus areas, the semiconductor design company may now be through the worst of it.

It was a subdued summer for Ambarella stock after bouncing off its March 17 lows near $36. With the $44 area serving as a floor, today's gains have the shares on track to topple their 200-day moving average on a closing basis for just the third time since June. Year-over-year though, AMBA is down 17.2%.

Analysts are split towards the security, with eight of the 14 in coverage sporting a "buy" or better rating, and the remaining six carrying a tepid "hold" or worse. Meanwhile, the equity's 12-month consensus target price of $63.23 is a hefty 18% premium to current levels.

Lastly, using options to speculate on AMBA's next move could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 51% stands higher than 21% of readings in its annual range, implying options players are pricing in relatively low volatility expectations at the moment. 

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