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NVIDIA (NVDA) to Report Q1 Earnings: What's in the Cards?
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NVIDIA Corporation (NVDA - Free Report) is set to report first-quarter fiscal 2018 results on May 9. Last quarter, the company posted a positive earnings surprise of 19.3%. Additionally, NVIDIA surpassed the Zacks Consensus Estimate in all the trailing four quarters with an average positive surprise of 27.4%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Widely known for its video gaming chips, NVIDIA has pioneered the art and science of visual computing. With singular focus on this field, the company offers specialized platforms for the gaming, automotive, data center and professional visualization markets. Its products, services and software deliver amazing experiences in virtual reality, artificial intelligence and autonomous cars.
We believe that NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned. We also feel that the higher adoption of NVIDIA’s Tegra processors could act as a catalyst, going forward.
On the flip side, the secular decline in the PC market has affected many chip makers. NVIDIA’s dependence on the PC market continues, and therefore is being hurt by adverse conditions. The preliminary data released by Gartner showed that PC shipments in the quarter were down 2.4% year over year to 62.2 million units. The decline marked the 10th straight quarter of year-over-year fall, which is the longest duration of decline in the history of the PC industry.
Also, Gartner’s forward-looking statements make us a shade cautious about the prospects of the PC industry. The research firm agreed that the recent surge in DRAM prices and short supply of SSD will lead to an increase in PC prices.
Mikako Kitagawa, principal analyst at Gartner said, "The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in 1Q17. This issue will grow into a bigger problem in 2Q17, and we expect it to continue throughout 2017." IDC also predicted that consumer demand will remain under pressure. This makes us slightly cautious about NVIDIA’s near-term performance.
Additionally, competition from the likes of Intel (INTC - Free Report) and QUALCOMM Inc. remains a near-term headwind.
Our proven model does not conclusively show that NVIDIA is likely to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Negative Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate (63 cents) and the Zacks Consensus Estimate (66 cents), stands at -4.55%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVIDIA has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
DHT Holdings, Inc. (DHT - Free Report) , with an Earnings ESP of +0.22% and a Zacks Rank #3
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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NVIDIA (NVDA) to Report Q1 Earnings: What's in the Cards?
NVIDIA Corporation (NVDA - Free Report) is set to report first-quarter fiscal 2018 results on May 9. Last quarter, the company posted a positive earnings surprise of 19.3%. Additionally, NVIDIA surpassed the Zacks Consensus Estimate in all the trailing four quarters with an average positive surprise of 27.4%.
Let's see how things are shaping up for this announcement.
Factors to Consider
Widely known for its video gaming chips, NVIDIA has pioneered the art and science of visual computing. With singular focus on this field, the company offers specialized platforms for the gaming, automotive, data center and professional visualization markets. Its products, services and software deliver amazing experiences in virtual reality, artificial intelligence and autonomous cars.
We believe that NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned. We also feel that the higher adoption of NVIDIA’s Tegra processors could act as a catalyst, going forward.
On the flip side, the secular decline in the PC market has affected many chip makers. NVIDIA’s dependence on the PC market continues, and therefore is being hurt by adverse conditions. The preliminary data released by Gartner showed that PC shipments in the quarter were down 2.4% year over year to 62.2 million units. The decline marked the 10th straight quarter of year-over-year fall, which is the longest duration of decline in the history of the PC industry.
Also, Gartner’s forward-looking statements make us a shade cautious about the prospects of the PC industry. The research firm agreed that the recent surge in DRAM prices and short supply of SSD will lead to an increase in PC prices.
Mikako Kitagawa, principal analyst at Gartner said, "The price hike will suppress PC demand even further in the consumer market, discouraging buyers away from PC purchases unless it is absolutely necessary. The price hike started affecting the market in 1Q17. This issue will grow into a bigger problem in 2Q17, and we expect it to continue throughout 2017." IDC also predicted that consumer demand will remain under pressure. This makes us slightly cautious about NVIDIA’s near-term performance.
Additionally, competition from the likes of Intel (INTC - Free Report) and QUALCOMM Inc. remains a near-term headwind.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation Price and EPS Surprise | NVIDIA Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that NVIDIA is likely to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Negative Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate (63 cents) and the Zacks Consensus Estimate (66 cents), stands at -4.55%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVIDIA has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Tyson Foods, Inc. (TSN - Free Report) , with an Earnings ESP of +3.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DHT Holdings, Inc. (DHT - Free Report) , with an Earnings ESP of +0.22% and a Zacks Rank #3
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>