Based on these findings, Faucette reduced his full-year revenue estimates for GoPro by 5%, while lowering his earnings target by 23%. His new revenue estimate is in line with the current Wall Street consensus, while Morgan Stanley's earnings target sits among the lowest Street projections today.
If Faucette's GoPro views are on point, it's still unclear exactly how these lower estimates would trickle down to Ambarella. What's bad for the goose is indeed also terrible for the gander, given the close business relationship between these two companies. But a 5% revenue reduction doesn't seem like it should translate into an 11% reduction of Ambarella's total market value. Remember, the components supplier has no reason to worry about GoPro's bottom-line profits, which is where Morgan Stanley placed its largest cuts this time.
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The article Why Ambarella Inc. Stock Fell Thursday originally appeared on Fool.com.
Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Ambarella and GoPro. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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