In the latest trading session, Nvidia (NVDA) closed at $271.34, marking a +1.17% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.53%. At the same time, the Dow added 0.57%, 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 3.52% over the past month, outpacing the Computer and Technology sector's gain of 0.86% and the S&P 500's gain of 2.16% in that time.
Investors will be hoping for strength from NVDA as it approaches its next earnings release, which is expected to be November 8, 2018. On that day, NVDA is projected to report earnings of $1.93 per share, which would represent year-over-year growth of 45.11%. Our most recent consensus estimate is calling for quarterly revenue of $3.25 billion, up 23.45% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.96 per share and revenue of $13.02 billion, which would represent changes of +61.79% and +34.06%, respectively, from the prior year.
Investors should also note any 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.
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 1.02% higher. NVDA currently has a Zacks Rank of #3 (Hold).
In terms of valuation, NVDA is currently trading at a Forward P/E ratio of 33.7. For comparison, its industry has an average Forward P/E of 12.01, which means NVDA is trading at a premium to the group.
We can also see that NVDA currently has a PEG ratio of 3.16. 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. NVDA's industry had an average PEG ratio of 1.62 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 103, which puts it in the top 40% 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.
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