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Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know

Nvidia (NVDA) closed at $449.11 in the latest trading session, marking a +1.98% move from the prior day. This change outpaced the S&P 500's 0.36% gain on the day. At the same time, the Dow added 0.62%, and the tech-heavy Nasdaq gained 0.35%.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. This is expected to be August 19, 2020. In that report, analysts expect NVDA to post earnings of $1.93 per share. This would mark year-over-year growth of 55.65%. Our most recent consensus estimate is calling for quarterly revenue of $3.65 billion, up 41.71% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.90 per share and revenue of $14.47 billion, which would represent changes of +36.44% and +32.57%, respectively, from the prior year.

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

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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 0.11% higher. NVDA is currently a Zacks Rank #3 (Hold).

Investors should also note NVDA's current valuation metrics, including its Forward P/E ratio of 55.73. Its industry sports an average Forward P/E of 29.89, so we one might conclude that NVDA is trading at a premium comparatively.

It is also worth noting that NVDA currently has a PEG ratio of 3.3. 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. The Semiconductor - General was holding an average PEG ratio of 3.02 at yesterday's closing price.

The Semiconductor - General industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 44, putting it in the top 18% 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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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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