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

Zacks Equity Research

Nvidia (NVDA) closed the most recent trading day at $174.07, moving +1.34% from the previous trading session. This change outpaced the S&P 500's 0.51% gain on the day. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.75%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 2.85% over the past month, outpacing the Computer and Technology sector's gain of 2.59% and lagging the S&P 500's gain of 3.44% in that time.

NVDA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.57, down 14.67% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.90 billion, down 8.79% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.34 per share and revenue of $10.73 billion. These totals would mark changes of -19.58% and -8.44%, respectively, from last year.

Any recent changes to analyst estimates for NVDA should also be noted by investors. These revisions help to show the ever-changing nature of near-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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.55% lower. NVDA is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that NVDA has a Forward P/E ratio of 32.15 right now. This represents a premium compared to its industry's average Forward P/E of 18.9.

It is also worth noting that NVDA currently has a PEG ratio of 3.36. 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. The Semiconductor - General was holding an average PEG ratio of 1.95 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 35% 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.

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


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