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Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Cohen & Steers (CNS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Nvidia (NVDA) closed at $243.06 in the latest trading session, marking a -1.13% move from the prior day. This change lagged the S&P 500's daily loss of 0.03%. At the same time, the Dow lost 0.36%, and the tech-heavy Nasdaq lost 0.04%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 9.29% over the past month, lagging the Computer and Technology sector's loss of 4.86% and the S&P 500's loss of 3.08% in that time.

NVDA will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2018. On that day, NVDA is projected to report earnings of $1.93 per share, which would represent year-over-year growth of 45.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.25 billion, up 23.44% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.96 per share and revenue of $13.02 billion. These totals would mark changes of +61.79% and +34.06%, respectively, from last year.

Any recent changes to analyst estimates for NVDA should also be noted by investors. Recent revisions tend to reflect the latest near-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection remained stagnant. NVDA currently has a Zacks Rank of #3 (Hold).

Investors should also note NVDA's current valuation metrics, including its Forward P/E ratio of 30.89. Its industry sports an average Forward P/E of 12.06, so we one might conclude that NVDA is trading at a premium comparatively.

We can also see that NVDA currently has a PEG ratio of 2.9. 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. Semiconductor - General stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 235, which puts it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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


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