Nvidia (NVDA) Stock Sinks As Market Gains: What You Should Know
Nvidia (NVDA) closed at $195.09 in the latest trading session, marking a -0.27% move from the prior day. This move lagged the S&P 500's daily gain of 0.29%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.19%.
Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 13.38% over the past month. This has outpaced the Computer and Technology sector's loss of 0.13% and the S&P 500's gain of 0.32% in that time.
NVDA will be looking to display strength as it nears its next earnings release, which is expected to be November 14, 2019. The company is expected to report EPS of $1.57, down 14.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.90 billion, down 8.79% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.34 per share and revenue of $10.73 billion. These totals would mark changes of -19.58% and -8.44%, respectively, from last year.
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 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.55% lower. NVDA is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, NVDA currently has a Forward P/E ratio of 36.62. This valuation marks a premium compared to its industry's average Forward P/E of 20.04.
Meanwhile, NVDA's PEG ratio is currently 3.83. 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 1.99 based on yesterday's closing prices.
The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 212, which puts it in the bottom 17% 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.
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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.