AMBARELLA INC

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio4.4x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-3.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-3.4%, ROC=-156.1%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)35.8x

  ✗Dreman< 8x

  Price / Book Value per Share4.4x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-2.5%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=2.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=4.4x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share45.4x

  ✗Ackman<= 25

  Price vs. Trailing Low125% of trailing low ($47.99)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-2.12%; #3573/6340 (top 56.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2338; #4013/6449 (top 62.2%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share11.29x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+3.7%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1574; #4009/5247 (top 76.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+0.37%; #2476/4519 (top 54.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+13.91%; #1647/6202 (top 26.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 2▾

  AMBA overvalued: all 2 models price fair value below $60.12 (median $30.91)

  Munger fair value$13.84

  ✗Munger-334.4% margin vs $60.12

  Ackman fair value$47.98

  ✗Ackman-25.3% margin vs $60.12
• Profitability6% pass✓ 5✗ 30▾

  15 of 16 flag AMBA's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)8/17 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)-839.2%

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)8/17 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-15.9%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-21.1% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-65.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-9.1%

  ✗Lynch> 15%

  EBIT / Enterprise Value-3.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-3.4%, ROC=-156.1%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-9.50%

  ✗PiotroskiROA > 0

  ROA Change YoY-17.00% -> -9.50% (delta: +7.50%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=9.21%, ROA=-9.50%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY60.5% -> 59.2%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-12.9%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-9.1%

  ✗Dreman> 12%

  Margin of SafetyP/B=4.4x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-21.3% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency8/16 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-14.9%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-9.1%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-68.2% (2023) -> -21.1% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 60.4% -> 59.2%, operating margin -68.2% -> -21.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-2.12%; #3573/6340 (top 56.4%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+31.34%; #1355/3702 (top 36.6%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-9.08%; #3367/5226 (top 64.4%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0756; #3120/5884 (top 53.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-1.7% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years2/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag AMBA's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities2.85

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDA

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section
• Verdicts14% pass✓ 2✗ 12▾

  Split decision: 11 FAIL · 3 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (0/9)✗LynchFAIL (0/7)✗GreenblattRank #2414✓PiotroskiPASS (F-Score 5)✗DremanFAIL (2/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✓AckmanPASS (4/9)✗TempletonFAIL (2/8)•SleepNEUTRAL (4/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag AMBA's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio2.85

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)

  ✗Buffett> 10%

  ROIC - WACC

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-156.1%

  ✗Greenblatt> 25%

  Current Ratio Change YoY2.65 -> 2.31

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.41x -> 0.49x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities2.85

  ✓Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Growth38% pass✓ 5✗ 8▾

  5 of 8 flag AMBA's growth — Graham, Lynch, Dreman +2 more

  EPS Growth (3-yr avg, 10-yr window)-839.2%

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 127.5% vs Rev: 20.0%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$0.50 (2010) -> $-1.78 (2025)

  ✗DremanPositive over recent years

  EPS CAGR1.4% CAGR over 7 years

  ✗Dreman> 5% annualized

  Positive Net Income Frequency8/16 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth25.8%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 60.4% -> 59.2%, operating margin -68.2% -> -21.1%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR11.9%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-1.7% over 5 years

  ✗Neff7%-20% annualized
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag AMBA's cash flow — Buffett, Lynch, Dreman +3 more

  Free Cash Flow Proxy$-65.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$9.7M

  ✗LynchPositive and growing

  Operating Cash Flow$73.5M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=9.21%, ROA=-9.50%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)35.8x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=2.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive16/16 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap0.4%

  ✗Ackman>= 4%

  Price / FCF per Share45.4x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency16/16 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$9.7M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+0.37%; #2476/4519 (top 54.8%)

  ✗OshaughnessyTop 10% of eligible cross-section