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

Zacks Equity Research
In the latest trading session, Electronic Arts (EA) closed at $87.50, marking a -1.89% move from the previous day.

Nvidia (NVDA) closed at $182.28 in the latest trading session, marking a +1.51% move from the prior day. This move outpaced the S&P 500's daily gain of 1.16%. At the same time, the Dow added 1.27%, and the tech-heavy Nasdaq gained 1.29%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 16.4% in the past month. In that same time, the Computer and Technology sector gained 3.18%, while the S&P 500 gained 1.92%.

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 $0.82, down 60% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue 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.

Investors should also note any recent changes to analyst estimates for NVDA. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.56% lower. NVDA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, NVDA is currently trading at a Forward P/E ratio of 33.72. Its industry sports an average Forward P/E of 17.02, so we one might conclude that NVDA is trading at a premium comparatively.

It is also worth noting that NVDA currently has a PEG ratio of 3.63. 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 industry currently had an average PEG ratio of 2.26 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 210, putting it in the bottom 18% 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.

To follow NVDA in the coming trading sessions, be sure to utilize Zacks.com.

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