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

In the latest trading session, Nvidia (NVDA) closed at $505.51, marking a +0.96% move from the previous day. The stock lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.52%, and the tech-heavy Nasdaq gained 1.72%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had lost 1.6% over the past month. This has was narrower than the Computer and Technology sector's loss of 4.28% and the S&P 500's loss of 3.29% in that time.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. In that report, analysts expect NVDA to post earnings of $2.56 per share. This would mark year-over-year growth of 43.82%. Our most recent consensus estimate is calling for quarterly revenue of $4.41 billion, up 46.35% from the year-ago period.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $9.11 per share and revenue of $15.81 billion. These results would represent year-over-year changes of +57.34% and +44.8%, respectively.

It is also important to note the recent changes to analyst estimates for NVDA. These revisions typically reflect the latest short-term business trends, which can change frequently. 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, 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 1.1% higher. NVDA currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, NVDA is holding a Forward P/E ratio of 54.95. This valuation marks a premium compared to its industry's average Forward P/E of 27.11.

We can also see that NVDA currently has a PEG ratio of 3.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NVDA's industry had an average PEG ratio of 2.97 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 236, which puts it in the bottom 8% 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.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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