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

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In the latest trading session, Nvidia (NVDA - Free Report) closed at $408.62, marking a -1.98% move from the previous day. This move lagged the S&P 500's daily loss of 0.65%. At the same time, the Dow lost 0.77%, and the tech-heavy Nasdaq lost 1.27%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 13.28% in the past month. In that same time, the Computer and Technology sector gained 7.86%, while the S&P 500 gained 7.76%.

Investors will be hoping for strength from NVDA as it approaches its next earnings release. In that report, analysts expect NVDA to post earnings of $1.93 per share. This would mark year-over-year growth of 55.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.65 billion, up 41.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.90 per share and revenue of $14.47 billion, which would represent changes of +36.44% and +32.57%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for NVDA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. NVDA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 52.75. For comparison, its industry has an average Forward P/E of 31.34, which means NVDA is trading at a premium to the group.

We can also see that NVDA currently has a PEG ratio of 3.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVDA's industry had an average PEG ratio of 2.97 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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