A forensic read on Ambarella Inc built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
C · Mixed — selective
Forensic grade
Safe
Financial health
2.9
Distress distance
Clean
Earnings quality
3
Forensic signals
-13.1%
ROE
37.2%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Ambarella Inc earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 2.9, placing it in the Safe zone. 3 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-15.3%
FY2026
Return on invested capital.Return on invested capital is -15.3% in the latest fiscal year and rising across FY2024–FY2026 from -28.4%. After-tax operating profit was ($122M) in FY2024 and ($65M) in FY2026, with operating income at -68.2% of revenue in FY2024, -44.4% in FY2025 and -21.1% in FY2026. The capital base behind it went from $430M in FY2024 to $426M in FY2026 (-1%), while the revenue it carried went from $226M to $391M. $114M of the $426M base at FY2026 is short-term investments (26.6%) — securities held beside cash, which the base keeps because only cash is subtracted from it; they earn the balance sheet's yield, which is not in the operating profit above, so the loss on the operating capital is larger than this rate shows.
+3.5%/yr
FY2024–FY2026
Share-count dilution.Diluted share count changed +7% over the last 2 years to FY2026 (+3.5%/yr). The count is growing — 39.9M shares in FY2024, 42.7M in FY2026: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~3.5% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2024 has been diluted ~7%.
25% of rev
FY2026
Stock-based comp load.Stock-based compensation ran 25% of revenue and 169% of free cash flow in FY2026 — about $2.30 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 3.5% a year across FY2024–FY2026 and that rate is not falling, so total profit has to grow by that much annually before any of it reaches a share. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
Key fundamentals
Latest Revenue$390.7M
Revenue Growth YoY+37.2%
Revenue CAGR (2yr)+31.3%
Net Margin-19.4%
Free Cash Flow$58.0M
Return on Equity-13.1%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Ambarella Inc's actual 10-K/10-Q/8-K filings?