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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 $191.79, moving +0.44% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.11%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq gained 0.19%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 27.93% over the past month. This has outpaced the Computer and Technology sector's gain of 5.46% and the S&P 500's gain of 3.84% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. In that report, analysts expect NVDA to post earnings of $0.82 per share. This would mark a year-over-year decline of 60%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.20 billion, down 31.36% from the year-ago period.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $5.33 per share and revenue of $11.19 billion. These results would represent year-over-year changes of -19.73% and -4.46%, respectively.

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 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. 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 0.56% lower. NVDA currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that NVDA has a Forward P/E ratio of 35.86 right now. For comparison, its industry has an average Forward P/E of 18.46, which means NVDA is trading at a premium to the group.

Meanwhile, NVDA's PEG ratio is currently 3.86. 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 2.15 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 212, putting 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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