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Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Nvidia (NVDA) closed at $171.30, marking a +1.7% move from the previous day. This change outpaced the S&P 500's 0.28% gain on the day. Elsewhere, the Dow gained 0.07%, while the tech-heavy Nasdaq added 0.71%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 9.31% over the past month. This has outpaced the Computer and Technology sector's gain of 2.34% and the S&P 500's gain of 1.93% 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 August 15, 2019. The company is expected to report EPS of $1.15, down 40.72% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.55 billion, down 18.48% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.27 per share and revenue of $10.88 billion, which would represent changes of -20.63% and -7.15%, respectively, from the prior 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 has moved 0.66% lower within the past month. NVDA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 31.95. This represents a premium compared to its industry's average Forward P/E of 17.22.

It is also worth noting that NVDA currently has a PEG ratio of 3.41. 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 2.25 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 213, which puts it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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