On Aug 16, 2016, Zacks Investment Research upgraded NVIDIA Corporation (NVDA - Free Report) to a Zacks Rank #1 (Strong Buy). With a robust return of 171.2% over the past one year, positive estimate revisions over the last 60 days and an encouraging revenue guidance for the third quarter, NVIDIA is an attractive investment opportunity.
Why the Upgrade?
Over the past 60 days, 11 out of 13 estimates for fiscal 2017 were revised upward, taking the Zacks Consensus Estimate up by 27 cents (17.3%) to $1.83 per share. NVIDIA also delivered positive earnings surprises in the last four quarters with an average beat of 28.5%.
NVIDIA’s revenues not only increased 23.9% year over year to $1.428 billion in second-quarter fiscal 2017, but also surpassed the Zacks Consensus Estimate of $1.355 billion. The year-over-year increase was primarily due to better-than-expected growth across all the platforms, that is, GPUs gaming platform, Professional Visualization, datacenter and Tegra automotive platforms.
The company posted earnings (including stock-based compensation but excluding other one-time items) of 44 cents per share for the quarter, up on a year-over-year basis. The Zacks Consensus Estimate was pegged at 37 cents.
Buoyed by the better-than-expected second-quarter results, the company provided positive third quarter fiscal 2017 guidance. For the third quarter of fiscal 2017, NVIDIA expects revenues of approximately $1.68 billion (+/-2%). The Zacks Consensus Estimate is pegged at $1.68 billion.
Moreover, from a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate, which signifies a huge upward potential. NVIDIA currently trades at a forward P/E of 34.47x compared with the industry group average of 52.40x.
Adding to the positives, the company recently announced three new high end graphics cards for notebooks. GeForce GTX 1080, GTX 1070 and GTX 1060 are the first consumer graphics cards based on the Pascal architecture. We believe this will take the mobile gaming experience to a new level.
With the launch of these GPUs, NVIDIA can maximize user experience by offering high performance computing (HPC) capabilities. Also, these GPUs are said to be more energy efficient than the earlier versions. Hence, the launch of this product will enable NVIDIA to increase its customer base and help in garnering additional revenues.
Furthermore, we believe that NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned. We also believe that the higher adoption of NVIDIA’s Tegra processors could act as a catalyst, going forward.
Nonetheless, competition from the likes of Intel (INTC - Free Report) and QUALCOMM Inc. (QCOM - Free Report) remains a near-term headwind.
Besides NVIDIA, investors may consider Facebook, Inc. , another Zacks Rank #1 stock in the technology sector.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Aug 16, 2016, Zacks Investment Research upgraded NVIDIA Corporation (NVDA - Free Report) to a Zacks Rank #1 (Strong Buy). With a robust return of 171.2% over the past one year, positive estimate revisions over the last 60 days and an encouraging revenue guidance for the third quarter, NVIDIA is an attractive investment opportunity.
Why the Upgrade?
Over the past 60 days, 11 out of 13 estimates for fiscal 2017 were revised upward, taking the Zacks Consensus Estimate up by 27 cents (17.3%) to $1.83 per share. NVIDIA also delivered positive earnings surprises in the last four quarters with an average beat of 28.5%.
NVIDIA’s revenues not only increased 23.9% year over year to $1.428 billion in second-quarter fiscal 2017, but also surpassed the Zacks Consensus Estimate of $1.355 billion. The year-over-year increase was primarily due to better-than-expected growth across all the platforms, that is, GPUs gaming platform, Professional Visualization, datacenter and Tegra automotive platforms.
The company posted earnings (including stock-based compensation but excluding other one-time items) of 44 cents per share for the quarter, up on a year-over-year basis. The Zacks Consensus Estimate was pegged at 37 cents.
Buoyed by the better-than-expected second-quarter results, the company provided positive third quarter fiscal 2017 guidance. For the third quarter of fiscal 2017, NVIDIA expects revenues of approximately $1.68 billion (+/-2%). The Zacks Consensus Estimate is pegged at $1.68 billion.
Moreover, from a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate, which signifies a huge upward potential. NVIDIA currently trades at a forward P/E of 34.47x compared with the industry group average of 52.40x.
Adding to the positives, the company recently announced three new high end graphics cards for notebooks. GeForce GTX 1080, GTX 1070 and GTX 1060 are the first consumer graphics cards based on the Pascal architecture. We believe this will take the mobile gaming experience to a new level.
With the launch of these GPUs, NVIDIA can maximize user experience by offering high performance computing (HPC) capabilities. Also, these GPUs are said to be more energy efficient than the earlier versions. Hence, the launch of this product will enable NVIDIA to increase its customer base and help in garnering additional revenues.
Furthermore, we believe that NVIDIA’s innovative product pipeline and strength in gaming and high-end notebook GPUs keep it well positioned. We also believe that the higher adoption of NVIDIA’s Tegra processors could act as a catalyst, going forward.
Nonetheless, competition from the likes of Intel (INTC - Free Report) and QUALCOMM Inc. (QCOM - Free Report) remains a near-term headwind.
Besides NVIDIA, investors may consider Facebook, Inc. , another Zacks Rank #1 stock in the technology sector.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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