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Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know

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Nvidia (NVDA - Free Report) closed the most recent trading day at $525.83, moving +1.56% from the previous trading session. This change outpaced the S&P 500's 0.13% gain on the day. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.15%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 3.34% over the past month, lagging the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 2.59% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. On that day, NVDA is projected to report earnings of $2.80 per share, which would represent year-over-year growth of 48.15%. Meanwhile, our latest consensus estimate is calling for revenue of $4.82 billion, up 55.26% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $9.71 per share and revenue of $16.49 billion. These results would represent year-over-year changes of +67.7% and +51.04%, respectively.

Any recent changes to analyst estimates for NVDA should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1% higher within the past month. NVDA currently has a Zacks Rank of #2 (Buy).

Digging into valuation, NVDA currently has a Forward P/E ratio of 53.3. This valuation marks a premium compared to its industry's average Forward P/E of 29.47.

We can also see that NVDA currently has a PEG ratio of 2.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. NVDA's industry had an average PEG ratio of 3.04 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 232, putting it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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