What's in the Offing for NVIDIA (NVDA) This Earnings Season?

NVIDIA Corporation NVDA is scheduled to release first-quarter fiscal 2023 results on May 25.

For the fiscal first quarter, the company expects revenues of $8.1 billion (+/-2%). The Zacks Consensus Estimate for the same is pegged at $8.12 billion, indicating a 43.4% jump from the year-ago reported figure.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.30 per share, suggesting a significant year-over-year improvement of 41.3%.

The company’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 7%.

Let’s see how things have shaped up before the announcement.

NVIDIA Corporation Price and EPS Surprise

NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote

Factors to Consider

NVIDIA’s growth opportunities in ray-traced gaming, rendering, high-performance computing and AI are likely to have been driving factors during the period in discussion. A series of blockbuster AAA titles, which pledged support for NVIDIA RTX ray-tracing technology, might have been an upside as well.

The continued strength in its data-center business on the growing adoption of cloud-based solutions amid the pandemic-induced work-from-home wave is expected to have boosted NVDA’s first-quarter revenues. An increase in the Hyperscale demand and the growing adoption in the inference market are likely to have been tailwinds during the to-be-reported quarter.

Furthermore, the company’s Automotive and Professional Visualization divisions had shown an improvement in trends in three of the last four quarters. The Automotive segment’s revenues plunged 13.8% year over year in the first quarter of fiscal 2023, primarily due to component supply constraints.

Professional Visualization’s revenues jumped a whopping 109.4% year over year in the first quarter. This growth mainly resulted from the increased sale of notebook workstation graphics processing units (“GPUs”) and the ramp-up of Ampere architecture GPUs.

While Professional Visualization trends are expected to have continued in the first quarter of fiscal 2023, the Automotive segment is anticipated to have showcased some recovery from supply constraints.

However, disruptions in retail channel sales due to travel restrictions and social-distancing measures implemented by governments worldwide to contain the spread of COVID-19 might have partially offset the benefits of the solid demand for the remote-working and online-learning hardware infrastructure.

What Our Model Says

Our proven model predicts an earnings beat for NVDA this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Currently, NVIDIA carries a Zacks Rank of 3 and has an Earnings ESP of +2.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Per our model, Commercial Metals CMC, Dynagas LNG Partners DLNG and The Kroger Company KR have the right combination of elements to post an earnings beat in their upcoming releases.

Commercial Metals sports a Zacks Rank #1 and has an Earnings ESP of +38.66%. The company is scheduled to report third-quarter fiscal 2022 results on Jun 16. Commercial Metals’ earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 16%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CMC’s third-quarter earnings is pegged at $1.54 per share, indicating a year-over-year increase of 48.1%. The consensus mark for revenues stands at $2.19 billion, suggesting a year-over-year increase of 18.9%.

Dynagas LNG Partners is expected to report first-quarter 2022 results on Jun 16. The company carries a Zacks Rank #2 and has an Earnings ESP of +3.03% at present. Dynagas LNG Partners’ earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 8.8%.

The Zacks Consensus Estimate for quarterly earnings is pegged at 17 cents per share, suggesting a year-over-year decline of 19.1%. DLNG’s quarterly revenues are estimated to decline by 6.2% year over year to $31.4 million.

Kroger currently carries a Zacks Rank #2 and has an Earnings ESP of +2.95%. The company is anticipated to report its first-quarter fiscal 2023 results on Jun 16. Kroger’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 22.1%.

The Zacks Consensus Estimate for Kroger’s first-quarter earnings stands at $1.27 per share, implying a year-over-year increase of 6.7%. KR is estimated to report revenues of $43.22 billion, suggesting growth of 4.7% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
Commercial Metals Company (CMC) : Free Stock Analysis Report
 
Dynagas LNG Partners LP (DLNG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.