Nvidia (NVDA) closed at $125.16 in the latest trading session, marking a -0.36% move from the prior day. This change was narrower than the S&P 500’s 1.72% loss on the day. Elsewhere, the Dow lost 1.62%, while the tech-heavy Nasdaq added 0.01%.
Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 29.88% in the past month. In that same time, the Computer and Technology sector lost 11.99%, while the S&P 500 lost 9.09%.
Nvidia will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.74, down 36.75% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.99 billion, down 15.73% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.50 per share and revenue of $27.46 billion. These totals would mark changes of -21.17% and +2.03%, respectively, from last year.
Any recent changes to analyst estimates for Nvidia should also be noted by investors. 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.
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, 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 18.15% lower. Nvidia is holding a Zacks Rank of #5 (Strong Sell) right now.
In terms of valuation, Nvidia is currently trading at a Forward P/E ratio of 35.93. This valuation marks a premium compared to its industry’s average Forward P/E of 11.21.
Investors should also note that NVDA has a PEG ratio of 2.93 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. NVDA’s industry had an average PEG ratio of 1.82 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 183, which puts it in the bottom 28% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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