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

Zacks Equity Research

Nvidia (NVDA) closed the most recent trading day at $202.92, moving -1.87% from the previous trading session. This move lagged the S&P 500's daily loss of 0.08%. Meanwhile, the Dow lost 0.07%, and the Nasdaq, a tech-heavy index, lost 0.59%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 18.8% over the past month, outpacing the Computer and Technology sector's gain of 4.71% and the S&P 500's gain of 2.7% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. This is expected to be November 14, 2019. In that report, analysts expect NVDA to post earnings of $1.57 per share. This would mark a year-over-year decline of 14.67%. Meanwhile, our latest consensus estimate is calling for revenue of $2.90 billion, down 8.79% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.34 per share and revenue of $10.73 billion, which would represent changes of -19.58% and -8.44%, respectively, from the prior year.

Any recent changes to analyst estimates for NVDA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 38.71. This represents a premium compared to its industry's average Forward P/E of 21.07.

It is also worth noting that NVDA currently has a PEG ratio of 4.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - General industry currently had an average PEG ratio of 1.98 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 40% 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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