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Nvidia (NVDA) Gains But Lags Market: What You Should Know

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In the latest trading session, Nvidia (NVDA - Free Report) closed at $152.35, marking a +1.03% move from the previous day. This move lagged the S&P 500's daily gain of 1.3%. Elsewhere, the Dow gained 1.21%, while the tech-heavy Nasdaq added 1.39%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had lost 4.08% over the past month. This has was narrower than the Computer and Technology sector's loss of 4.48% and the S&P 500's loss of 4.84% in that time.

Investors will be hoping for strength from NVDA as it approaches its next earnings release, which is expected to be August 15, 2019. On that day, NVDA is projected to report earnings of $1.15 per share, which would represent a year-over-year decline of 40.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.55 billion, down 18.48% from the year-ago period.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $5.27 per share and revenue of $10.88 billion. These results would represent year-over-year changes of -20.63% and -7.15%, respectively.

Investors might also notice recent changes to analyst estimates for NVDA. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Within the past 30 days, our consensus EPS projection has moved 1.22% lower. NVDA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 28.6. This represents a premium compared to its industry's average Forward P/E of 15.86.

Investors should also note that NVDA has a PEG ratio of 3.05 right now. 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. The Semiconductor - General industry currently had an average PEG ratio of 1.8 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 158, putting it in the bottom 39% 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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