Back to top

Image: Bigstock

Nvidia (NVDA) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest trading session, Nvidia (NVDA - Free Report) closed at $195.03, marking a +1.54% move from the previous day. This move outpaced the S&P 500's daily loss of 0.02%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 4.09% in the past month. In that same time, the Computer and Technology sector gained 2.65%, while the S&P 500 gained 2.91%.

NVDA will be looking to display strength as it nears its next earnings release, which is expected to be August 18, 2021. The company is expected to report EPS of $1.02, up 85.45% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.34 billion, up 64.1% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $3.97 per share and revenue of $24.93 billion. These results would represent year-over-year changes of +58.8% and +49.53%, respectively.

Any recent changes to analyst estimates for NVDA should also be noted by investors. 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.89% higher. NVDA is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note NVDA's current valuation metrics, including its Forward P/E ratio of 48.34. Its industry sports an average Forward P/E of 22.83, so we one might conclude that NVDA is trading at a premium comparatively.

Also, we should mention that NVDA has a PEG ratio of 2.75. 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. The Semiconductor - General industry currently had an average PEG ratio of 2.52 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 181, which puts it in the bottom 29% 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.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


NVIDIA Corporation (NVDA) - free report >>

Published in