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Nvidia (NVDA) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

Nvidia (NVDA) closed at $368 in the latest trading session, marking a +0.49% move from the prior day. This change lagged the S&P 500's 1.47% gain on the day. Elsewhere, the Dow gained 2.32%, while the tech-heavy Nasdaq added 1.2%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 7.87% in the past month. In that same time, the Computer and Technology sector gained 4.26%, while the S&P 500 gained 0.74%.

NVDA will be looking to display strength as it nears its next earnings release. In that report, analysts expect NVDA to post earnings of $1.95 per share. This would mark year-over-year growth of 57.26%. Meanwhile, our latest consensus estimate is calling for revenue of $3.65 billion, up 41.71% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.90 per share and revenue of $14.47 billion. These totals would mark changes of +36.44% and +32.57%, respectively, from last year.

Any recent changes to analyst estimates for NVDA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.66% higher within the past month. NVDA is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that NVDA has a Forward P/E ratio of 46.37 right now. This valuation marks a premium compared to its industry's average Forward P/E of 33.72.

It is also worth noting that NVDA currently has a PEG ratio of 2.75. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NVDA's industry had an average PEG ratio of 3.03 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 23, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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