Nvidia (NVDA) closed the latest trading day at $139.93, indicating a -0.21% change from the previous session’s end. This change lagged the S&P 500’s daily loss of 0.04%. Meanwhile, the Dow gained 0.07%, and the Nasdaq, a tech-heavy index, lost 0.05%.
The maker of graphics chips for gaming and artificial intelligence’s stock has climbed by 3.61% in the past month, falling short of the Computer and Technology sector’s gain of 5.93% and outpacing the S&P 500’s gain of 1.05%.
The investment community will be paying close attention to the earnings performance of Nvidia in its upcoming release. In that report, analysts expect Nvidia to post earnings of $0.84 per share. This would mark year-over-year growth of 61.54%. In the meantime, our current consensus estimate forecasts the revenue to be $37.72 billion, indicating a 70.68% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.94 per share and revenue of $129.02 billion, indicating changes of +126.15% and +111.78%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for Nvidia. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. The Zacks Consensus EPS estimate has moved 0.39% higher within the past month. Nvidia presently features a Zacks Rank of #2 (Buy).
Looking at its valuation, Nvidia is holding a Forward P/E ratio of 47.7. Its industry sports an average Forward P/E of 31.19, so one might conclude that Nvidia is trading at a premium comparatively.
One should further note that NVDA currently holds a PEG ratio of 2.39. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. Semiconductor – General stocks are, on average, holding a PEG ratio of 3.12 based on yesterday’s closing prices.
The Semiconductor – General industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 78, placing it within the top 32% of over 250 industries.
