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Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

Nvidia (NVDA) closed the most recent trading day at $548.50, moving -1.12% from the previous trading session. This move lagged the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.57%, while the tech-heavy Nasdaq added 0.09%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 6.72% over the past month, outpacing the Computer and Technology sector's gain of 6.16% and the S&P 500's gain of 4.43% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. On that day, NVDA is projected to report earnings of $2.80 per share, which would represent year-over-year growth of 48.15%. Meanwhile, our latest consensus estimate is calling for revenue of $4.83 billion, up 55.41% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $9.72 per share and revenue of $16.49 billion. These results would represent year-over-year changes of +67.88% and +51.08%, respectively.

Any recent changes to analyst estimates for NVDA should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. NVDA is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 57.1. Its industry sports an average Forward P/E of 25.41, so we one might conclude that NVDA is trading at a premium comparatively.

We can also see that NVDA currently has a PEG ratio of 3.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor - General stocks are, on average, holding a PEG ratio of 3.14 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 131, which puts it in the bottom 49% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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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Zacks Investment Research