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

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In the latest trading session, Nvidia (NVDA - Free Report) closed at $266.84, marking a 1.54% move from the previous day. This change outpaced the S&P 500's 0.17% loss on the day. Elsewhere, the Dow lost 0.3%, while the tech-heavy Nasdaq lost 0.14%.

Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 4.35% over the past month, outpacing the Computer and Technology sector's gain of 0.61% and the S&P 500's gain of 2.34% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. This is expected to be November 8, 2018. The company is expected to report EPS of $1.93, up 45.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.25 billion, up 23.45% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $7.96 per share and revenue of $13.02 billion. These results would represent year-over-year changes of +61.79% and +34.06%, respectively.

Investors should also note any recent changes to analyst estimates for NVDA. These revisions help to show the ever-changing nature of near-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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 1.02% higher. NVDA is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that NVDA has a Forward P/E ratio of 33.03 right now. For comparison, its industry has an average Forward P/E of 13.13, which means NVDA is trading at a premium to the group.

It is also worth noting that NVDA currently has a PEG ratio of 3.1. 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. Semiconductor - General stocks are, on average, holding a PEG ratio of 1.72 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 50, putting it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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