Why Ambarella Inc. Stock Growth Is No Sure Thing

Investors have good reasons to be optimistic about Ambarella's (NASDAQ: AMBA) business. After all, the camera tech specialist owns valuable semiconductor design properties that could earn it an early leadership position in attractive markets including automotive, computer vision, drones, and wearable devices.

That vast addressable market supports the company's premium valuation. Even after a double-digit decline so far in 2017, Ambarella is priced at 30 times earnings, compared to a P/E of 24 for the broader market.

It's far from a sure thing that the company will grow into that valuation, though. Here are few reasons why the stock could continue underperforming from here.

Source: Fool.com