Nvidia (NVDA) closed at $210.89 in the latest trading session, marking a -0.05% move from the prior day. This change was narrower than the S&P 500’s daily loss of 0.61%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.67%.
Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 42% in the past month. In that same time, the Computer and Technology sector gained 17.44%, while the S&P 500 gained 8.32%.
Investors will be hoping for strength from Nvidia as it approaches its next earnings release, which is expected to be February 22, 2023. In that report, analysts expect Nvidia to post earnings of $0.81 per share. This would mark a year-over-year decline of 38.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.01 billion, down 21.31% from the year-ago period.
Investors might also notice recent changes to analyst estimates for Nvidia. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
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.
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 0.85% lower. Nvidia is currently a Zacks Rank #4 (Sell).
Valuation is also important, so investors should note that Nvidia has a Forward P/E ratio of 48.26 right now. This valuation marks a premium compared to its industry’s average Forward P/E of 21.86.
We can also see that NVDA currently has a PEG ratio of 4.05. 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 3.32 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 49, which puts it in the top 20% 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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