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

Zacks Equity Research
·3 mins read

Nvidia (NVDA) closed at $521.40 in the latest trading session, marking a +1.25% move from the prior day. This move lagged the S&P 500's daily gain of 1.61%. Meanwhile, the Dow gained 1.51%, and the Nasdaq, a tech-heavy index, added 1.87%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 1.94% in the past month. In that same time, the Computer and Technology sector lost 4.69%, while the S&P 500 lost 4.08%.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. The company is expected to report EPS of $2.56, up 43.82% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.41 billion, up 46.35% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $9.11 per share and revenue of $15.81 billion. These results would represent year-over-year changes of +57.34% and +44.8%, respectively.

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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.1% higher. NVDA is currently a Zacks Rank #3 (Hold).

Digging into valuation, NVDA currently has a Forward P/E ratio of 56.52. This represents a premium compared to its industry's average Forward P/E of 27.38.

It is also worth noting that NVDA currently has a PEG ratio of 3.13. 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. Semiconductor - General stocks are, on average, holding a PEG ratio of 3.03 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 237, which puts it in the bottom 7% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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