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Factors Likely to Influence NVIDIA's (NVDA) Q3 Earnings?
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NVIDIA Corporation (NVDA - Free Report) is scheduled to report third-quarter fiscal 2019 results on Nov 15.
Notably, the company has a stellar earnings surprise history. In the trailing four quarters, the company’s earnings surpassed the Zacks Consensus Estimate, with average positive earnings surprise being 29.9%.
In the last reported quarter, the company’s non-GAAP earnings came in at $1.94 per share, which increased 91% from the year-ago period and surpassed the Zacks Consensus Estimate of $1.84.
Revenues surged 40% year over year to $3.123 billion and beat the Zacks Consensus Estimate of $3.107 billion. It also exceeded management’s projection of $3.10 billion (+/-2%).
For the fiscal third quarter, NVIDIA expects revenues of $3.25 billion (+/-2%). For earnings, the Zacks Consensus Estimate is pegged at $1.91 per share, indicating year-over-year growth of 43.6%.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
NVIDIA is gaining from growth across all platforms — GPUs for gaming, Professional Visualization, datacenter and Tegra automotive. Further, growing traction in the artificial intelligence (AI) space is aiding the company’s top line.
During the last reported quarter, NVIDIA unveiled its Turing architecture, which includes real-time ray tracing technology, RT Cores as well as Tensor Cores for AI inferencing. The technology is likely to take gaming experience to a whole new level.
Furthermore, the launch of Turing-based Quadro platform will help NVIDIA cater to the requirement of professionals in media and entertainment, architecture and manufacturing industries. The technology is therefore anticipated to boost both its gaming and professional visualization segments.
Moreover, the company’s datacenter business is gaining from strong adoption of AI, deep learning, high-performance computing (HPC) and strong traction of the new Volta architecture. The company’s Volta-based V100 accelerator is expected to be the key growth driver in this regard.
Coming to automotive, increase in production of autonomous vehicle and AI-based smart cockpit infotainment solutions is a tailwind. Growing adoption of AI supercomputer, DRIVE Pegasus for autonomous vehicles by major car makers like Daimler and Bosch is a key catalyst.
However, given the likely absence of contribution from cryptocurrency, the company’s OEM segment revenues will continue to decline. Also, disappointing top-line results of some major chipmakers like Advanced Micro Devices (AMD - Free Report) and Texas Instruments (TXN - Free Report) , given the ongoing trade war and declining demand for memory chips, make us anxious about NVIDIA’s performance.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVIDIA currently carries a Zacks Rank #3 but has an Earnings ESP of -4.71%
A Key Pick
Here is a stock, which you may consider as our model shows that it has the right combination of elements to post an earnings beat in their upcoming releases:
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Factors Likely to Influence NVIDIA's (NVDA) Q3 Earnings?
NVIDIA Corporation (NVDA - Free Report) is scheduled to report third-quarter fiscal 2019 results on Nov 15.
Notably, the company has a stellar earnings surprise history. In the trailing four quarters, the company’s earnings surpassed the Zacks Consensus Estimate, with average positive earnings surprise being 29.9%.
In the last reported quarter, the company’s non-GAAP earnings came in at $1.94 per share, which increased 91% from the year-ago period and surpassed the Zacks Consensus Estimate of $1.84.
Revenues surged 40% year over year to $3.123 billion and beat the Zacks Consensus Estimate of $3.107 billion. It also exceeded management’s projection of $3.10 billion (+/-2%).
For the fiscal third quarter, NVIDIA expects revenues of $3.25 billion (+/-2%). For earnings, the Zacks Consensus Estimate is pegged at $1.91 per share, indicating year-over-year growth of 43.6%.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
NVIDIA is gaining from growth across all platforms — GPUs for gaming, Professional Visualization, datacenter and Tegra automotive. Further, growing traction in the artificial intelligence (AI) space is aiding the company’s top line.
During the last reported quarter, NVIDIA unveiled its Turing architecture, which includes real-time ray tracing technology, RT Cores as well as Tensor Cores for AI inferencing. The technology is likely to take gaming experience to a whole new level.
Furthermore, the launch of Turing-based Quadro platform will help NVIDIA cater to the requirement of professionals in media and entertainment, architecture and manufacturing industries. The technology is therefore anticipated to boost both its gaming and professional visualization segments.
Moreover, the company’s datacenter business is gaining from strong adoption of AI, deep learning, high-performance computing (HPC) and strong traction of the new Volta architecture. The company’s Volta-based V100 accelerator is expected to be the key growth driver in this regard.
Coming to automotive, increase in production of autonomous vehicle and AI-based smart cockpit infotainment solutions is a tailwind. Growing adoption of AI supercomputer, DRIVE Pegasus for autonomous vehicles by major car makers like Daimler and Bosch is a key catalyst.
However, given the likely absence of contribution from cryptocurrency, the company’s OEM segment revenues will continue to decline. Also, disappointing top-line results of some major chipmakers like Advanced Micro Devices (AMD - Free Report) and Texas Instruments (TXN - Free Report) , given the ongoing trade war and declining demand for memory chips, make us anxious about NVIDIA’s performance.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation Price and EPS Surprise | NVIDIA Corporation Quote
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVIDIA currently carries a Zacks Rank #3 but has an Earnings ESP of -4.71%
A Key Pick
Here is a stock, which you may consider as our model shows that it has the right combination of elements to post an earnings beat in their upcoming releases:
Adobe Systems Incorporated (ADBE - Free Report) with an Earnings ESP of +0.19% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>