Nvidia (NVDA) Overtakes Stock Gains: What You Need to Know


NOTvidia (NVDA) closed at $221.98 last trading session, marking a +1.91% move from the previous day. That move topped the S&P 500’s 1.61% daily gain. Meanwhile, the Dow Jones gained 1.45% and the Nasdaq, a technology-heavy index, added 0.36%.

Prior to today’s trading, shares of the maker of graphics chips for games and artificial intelligence were down 18.52% over the past month. This was lower than the IT & Technology sector’s loss of 6.03% and the S&P 500’s loss of 1.42% during this period.

Investors are hoping for Nvidia’s strength as it approaches its next earnings release. On that day, Nvidia is expected to report earnings of $1.29 per share, which would represent 40.22% year-over-year growth. Our most recent consensus estimate calls for quarterly revenue of $8.11 billion, up 43.29% from the prior year period.

NVDA’s full-year Zacks consensus estimates call for earnings of $5.54 per share and revenue of $34.56 billion. These results would represent year-over-year variations of +24.77% and +28.42%, respectively.

Any recent changes in analyst estimates for Nvidia should also be noted by investors. Recent revisions tend to reflect the latest short-term trading trends. Thus, positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Based on our research, we believe that these estimate revisions are directly related to the team’s close stock movements. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable track record of third-party audited success, with #1 stocks offering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has fallen 0.31% . Nvidia currently has a Zacks rank of #3 (Hold).

In terms of valuation, Nvidia is currently trading at a forward P/E ratio of 39.31. This represents a premium to its industry average Forward P/E of 12.49.

We can also see that NVDA currently has a PEG ratio of 2.34. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. Semiconductor – General stocks hold, on average, a PEG ratio of 2.2 based on yesterday’s closing prices.

The Semiconductors – General industry is part of the Information Technology sector. This group has a Zacks industry ranking of 31, which places it in the top 13% of over 250 industries.

The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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