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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 $190.67, moving +1.17% from the previous trading session. This change outpaced the S&P 500's 0.88% gain on the day. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq gained 1.32%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 8.45% over the past month. This has outpaced the Computer and Technology sector's gain of 5% and the S&P 500's gain of 3.96% 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 May 16, 2019. The company is expected to report EPS of $0.82, down 60% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.20 billion, down 31.36% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.33 per share and revenue of $11.19 billion. These totals would mark changes of -19.73% and -4.46%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for NVDA. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. 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 35.39. Its industry sports an average Forward P/E of 19.54, so we one might conclude that NVDA is trading at a premium comparatively.

Investors should also note that NVDA has a PEG ratio of 3.81 right now. 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 2.26 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 105, which puts it in the top 42% 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.

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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