Tracey Ryniec and David Bartosiak, Stock Strategists at Zacks Investment Research, discuss the future of chip maker Ambarella, Inc. (AMBA).

Shares have plunged 35% from its all time highs earlier this summer on fears that the company may be a one-trick pony with GoPro (GPRO) as its most prominent customer. A rare earnings miss and warning about weakness in GoPro’s third quarter only exacerbated the worries.

But Ambarella also has a few things up its sleeve. In July, it acquired privately-held VisLabs for $30 million. The Italian company is stocked with PhDs who are developing computer vision and intelligent control systems for automotive and other commercial applications, including autonomous vehicle driving systems.

10% of its revenue is also coming from cameras on drones, which creates another possible opportunity.

With shares selling off, Ambarella now has a forward P/E of 29. This Zacks Rank #3 (Hold) is expected to grow earnings by 54% this year.

Now that shares have pulled back, is this a buying opportunity? Watch our short video to learn what Tracey and David think about Ambarella’s future.

Ambarella Inc: http://www.zacks.com/stock/quote/AMBA?cid=CS-YOUTUBE-FT-VID

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