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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 $265.77, marking a -1.55% move from the previous day. This change lagged the S&P 500's daily loss of 0.04%. At the same time, the Dow added 0.15%, and the tech-heavy Nasdaq lost 0.67%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had lost 1.05% over the past month. This has was narrower than the Computer and Technology sector's loss of 1.53% and lagged the S&P 500's gain of 0.02% in that time.

NVDA will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2018. On that day, NVDA is projected to report earnings of $1.93 per share, which would represent year-over-year growth of 45.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.25 billion, up 23.44% from the year-ago period.

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 recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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 remained stagnant. NVDA currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 33.91. This represents a premium compared to its industry's average Forward P/E of 12.18.

Investors should also note that NVDA has a PEG ratio of 3.18 right now. 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 1.92 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 231, which puts it in the bottom 9% 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.

To follow NVDA in the coming trading sessions, be sure to utilize Zacks.com.




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