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Nvidia (NVDA) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

Nvidia (NVDA) closed at $549.46 in the latest trading session, marking a +0.69% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.4%. Meanwhile, the Dow lost 1.34%, and the Nasdaq, a tech-heavy index, lost 1.57%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 8.08% over the past month, outpacing the Computer and Technology sector's loss of 0.17% and the S&P 500's loss of 0.46% in that time.

Investors will be hoping for strength from NVDA as it approaches its next earnings release. The company is expected to report EPS of $2.56, up 43.82% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.41 billion, up 46.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.11 per share and revenue of $15.81 billion. These totals would mark changes of +57.34% and +44.8%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for NVDA. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.1% higher. NVDA is holding a Zacks Rank of #4 (Sell) right now.

Digging into valuation, NVDA currently has a Forward P/E ratio of 59.89. For comparison, its industry has an average Forward P/E of 28.52, which means NVDA is trading at a premium to the group.

Meanwhile, NVDA's PEG ratio is currently 2.98. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - General industry currently had an average PEG ratio of 3.02 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 244, which puts it in the bottom 4% 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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