Nvidia earnings: significant upside, despite pessimistic short-term sentiment

1:05 am ET, 13 Nov 2018

NVIDIA Corporation (NVDA) shares are trading at $190, down -7.6%. The company is announcing its quarterly earnings results on Thursday after the market close.  What's driving NVIDIA stock price? What's NVIDIA stock price forecast?

NVIDIA Corporation is a leading designer of graphics processing units for the gaming and professional markets. The company reports in four segments: Datacenter, Gaming, Professional Visualization, and Automotive. The company’s datacenter business is projected to be a growth engine for the next few years.

NVIDIA launched new GPU products based on its new Turing architecture, which will replace the profit-rich generation of GPUs known as Pascal. When the company releases its earnings this Thursday, we will have a much better idea of how the new Turing architecture is faring in the marketplace.

Investors are showing interest in NVIDIA because of its strong revenue growth.  On the other hand, few bearish investors worry about chip business slowing down. Last quarter’s revenue rose 40% to $3.12 billion and earnings per share came at $1.94 compared to $1.01 for the same period last year.

Third-quarter results will be released after market close on November 15, 2018. Analysts expect the company to earn $1.71 per share on revenue of $3.24 billion. The company beats analyst’s estimates in the previous four quarters.

What is the sentiment towards the NVDA stock? Our technical analysis shows that: 

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending positive.

Over the last month, NVIDIA Corporation (NVDA) returned -24.98%.

NVIDIA Corporation (NVDA) average analyst price target ($280.56) is 30.54% above its current price ($214.92).

For the latest price and information on NVIDIA Corporation, please visit Finstead and search for "NVDA price" or "NVDA news".

NVIDIA (NVDA) stock: still riding high

12:46 pm ET, 15 Aug 2018

NVIDIA Corporation (NVDA) shares are trading at $257, down 1.5%.  The company is reporting its fiscal Q2 earnings after the market close on Thursday.  What should investors know about NVIDIA? What's NVDA stock price forecast?

The expectations are riding high for this GPU specialist.  NVIDIA shares have returned over 30% year-to-date,  way above S&P 500's 7% return.  The stock reached an all-time high of $266.91 on June 14. 

If the company fails to crush analyst estimates, the stock is likely to get punished.  Long-term investors should view such a scenario as a buying opportunity.  It's natural that some quarters will be weaker because of tough year-over-year comparisons.  

The cryptocurrency market, which has been very volatile, is likely to affect the company's results.  Last quarter, revenue from application-specific boards for crypto mining accounted for about 9% of NVIDIA's total sales. Many crypto miners buy the company's gaming GPUs to power their mining operations, which implies the share of crypto in NVIDIA's overall revenue is greater than 9%.  

Now, let's look at the sentiment for the NVDA stock. Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is positive;
  • The mid-term sentiment (3-6 months) is positive;
  • The long-term sentiment (9-12 months) is positive. 

Over the last month, NVIDIA Corporation (NVDA) returned +4.86%.

NVIDIA Corporation (NVDA) average analyst price target ($273.45) is 4.6% above its current price ($261.43).

For the latest price and information on NVIDIA Corporation, please visit Finstead and search for "NVDA price" or "NVDA news".

Intel and Apple: What's Next?

3:13 pm ET, 03 Apr 2018

Intel’s (NASDAQ:INTC) stock price witnessed a big decline yesterday after Bloomberg reported that Apple would not use Intel chips for its Mac computers. As a part of the multi-step transition, Intel processors will be replaced by native Apple components starting 2020.

Apple did not respond to the ‘news’ and Intel denied acknowledging this as well.  Apart from Intel, its rivals such as Qualcomm, Broadcom, and Arms supply Apple with chips and processors. These are used for various purposes such as artificial intelligence and augmented reality — in addition to in-house chips for Macs, Apple Watches, AirPods, and Beats.

If Apple opts for its own chips instead of other manufacturers’, it will eliminate the critical dependency on the new chip models. It could soon stand out from the competition as the only PC and electronics maker utilizing its own processors.

The Kalamata code is in its initial developmental stage. It is a part of the larger strategy that aims at enabling Apple devices (Macs, iPhones, and iPads) to work in a similar and coordinated way.

This step is a major setback for Intel. The partnership between the two companies has caused the revival of Apple’s Macs and it also helped Intel get to a leading position in the electronics marketplace.

Intel's ability to produce powerful processors compared to its competitors through the use of the latest manufacturing technology has cemented its #1 position on the market.

Will the INTC stock price recover?  Per Finstead research, Intel's average analyst price target is $52, which is close to its current price. The upside is very small.

Intel has a fairly low valuation compared to its peers and lags behind its rivals QCOMCHKPTXNAMD, and NVDA.

Investors should consider a couple of points to estimate the impact of Bloomberg’s claim on Intel’s business going forward:

  • Bloomberg indicated that Apple makes up only 5% of Intel’s total revenue 
  • Apple held 7.6% market share for PC units in the most recent quarter, based on Gartner research.

Perhaps you should wait and see at this critical juncture until things fully play out.  

Micron Technology (MU): Where Does The Stock Price Go Now?

5:50 pm ET, 22 Mar 2018

Micron Technology (NASDAQ: MU) shares fell in the extended session today after the company surpassed analyst estimates following a weeks-long run-up on the stock, but gave a disappointing forecast.  

Micron shares declined more than 6% after hours, trading at $57.30.

Its shares have climbed 40% in the past month, because of the increasing demand for its products from various sources.

What's important to note in this case is that an earnings beat doesn't necessarily imply a surge in the stock price. The Company's guidance is a strong factor that influences the stock price. For example, a forward-looking guidance was sparked in the tech sector after the introduction of the U.S. tax reform bill, during the Q4 earnings.

So what’s the path for Micron's stock now? 

Per Finstead Research, Micron Technology’s average price target is $60 (visit Finstead and type "MU price target").

However, Micron Technology’s valuation is quite low compared to its peers, judging by forward P/E ratio.

There is some potential for the stock to bounce back, but it’s hard to say when and how this may occur.

Nvidia: Reasons To Be Bullish?

3:31 pm ET, 08 Feb 2018

Today after market close, Nvidia (NASDAQ: NVDA) is set to report its earnings for the fiscal quarter ending January 2018.  According to Finstead Research, Nvidia price target upside is -5.47% (visit Finstead and type "NVDA upside"). 

However, there are some fundamental reasons why investors are bullish about Nvidia.  

Nvidia has an opportunity to license its technology and accelerate its IP adoption in the mobile market.

Nvidia’s high-functionality gaming device priced affordably is a great growth avenue.  NVIDIA SHIELD Android TV device and GeForce NOW let users stream video games from the cloud.  The Company has plans to introduce an LTE version in its forthcoming versions of the gaming products.

Nvidia is generating more increasingly more revenue through advanced graphics cards such as GeForce GTX 750, GeForce GTX 800M, and GeForce GTX 980.

Tesla P100 GPU Accelerator uses High-Performance Computing (HPC) technology that can reduce operational costs by 70%. Similarly, Tesla M10 GPU can minimize the costs per user as it is capable of connecting 64 users per board, or up to 128 users per server using only 2 boards.

Products such as BFGD for an enhanced gaming experience, Jetson TK1 for robotics, Tegra K1 processor, and DGX-1 supercomputer customized for profound learning are all potentially great future growth opportunities for Nvidia.  Its consistent efforts in bringing in newer technologies are evident from the development of CES (computer vision system), DRIVE PX 2 (a powerful engine for AI used in vehicles), and Xavier (an AI supercomputer chip).

Nvidia's partnership with Baidu to use AI in cloud computing, self -driving vehicles and home assistance will encourage new product development and provide a great boost to the autonomous vehicle market.

The partnership between NVIDIA and VMware would let NVIDIA GRID technology run on the VMware Horizon Desktop-as-a-Service (DaaS) Platform to enhance its virtualization, automation, and cloud-based portfolios.  The GPU-based NVIDIA GRID software platform will be available on 50 server platforms. 

Over the last year, NVDA returned +92.30%.  This return is higher than Semiconductor industry (24.89%), Technology sector (16.05%), and S&P 500 (15.52%) returns.

NVIDIA Corporation (NVDA) Stock Guide

Updated at: 1:23 pm ET, 02 Sep 2020

Before we start: if you're looking for NVDA stock price, you can quickly find it out by visiting Finny and typing "NVDA quote". If you're looking for a quick scoop on NVDA stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "NVDA". You'll get all this info in one place. Or you can just type "NVDA news" to get the latest stock news.

Looking to buy or sell NVIDIA Corporation (NVDA)? Interested in getting the full scoop on NVDA, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this NVDA stock guide, we'll address key questions about NVDA, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are NVDA earnings?
2. When is NVDA earnings date?
3. What is NVDA dividend?
4. What is NVDA dividend yield?
5. What is NVDA stock forecast (i.e., prediction)?
6. NVDA buy or sell? What is NVDA Finny Score?
7. What are the reasons to buy NVDA? Why should I buy NVDA stock?
8. What are the reasons to sell NVDA? Why should I sell NVDA stock?
9. What are NVDA key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are NVDA earnings?

NVDA trailing 12-month earnings per share (EPS) is $5.44.

2. When is NVDA earnings date?

NVDA earnings date is November 12, 2020.

3. What is NVDA dividend?

NVDA forward dividend is $0.64.

4. What is NVDA dividend yield?

NVDA forward dividend yield is 0.12%.

Analyst Predictions

5. What is NVDA stock forecast (i.e., prediction)?

Based on NVDA analyst price targets, NVDA stock forecast is $406.18 (for a year from now). That means the average analyst price target for NVDA stock is $406.18. The prediction is based on 38 analyst estimates.

The low price target for NVDA is $260.00, while the high price target is $500.00.

NVDA analyst rating is Buy.

Analysis

6. NVDA buy or sell? What is NVDA Finny Score?

#{finnyScore:40}Our quantitative analysis shows 4 reasons to buy and 6 reasons to sell NVDA, resulting in Finny Score of 40.

7. What are the reasons to buy NVDA? Why should I buy NVDA stock?

Here are the reasons to buy NVDA stock:

  • Deep learning and artificial intelligence computing that rely on Nvidia's graphics chips present the firm with a potentially massive growth opportunity.
  • The firm has an increasingly stronger presence in the automotive segment, via infotainment systems and autonomous driving in the longer term, which should help diversify its revenue sources.
  • The increasing complexity of graphics processors provides a barrier to entry for most potential rivals, as it would be difficult to match Nvidia's large R&D budget.
  • NVIDIA has decided to license its graphics IP, which should generate strong revenues. Selling its own powerful and expensive chips is going to get more and more difficult, with alternatives from Qualcomm, ARM and Intel entering the market. If, however, it starts licensing the technology, it would be able to shift the manufacturing cost to licensees and also accelerate the adoption of its IP in the high-growth mobile markets.
  • The company’s shield gaming device is another growth avenue. Based on Android Jelly Bean, this handheld gaming device features a flip-up 5-inch touchscreen display, two analog joysticks, a control pad and buttons. Bluetooth peer-to-peer or WiFi communication is an added bonus.
  • The company is in the process of gaining market share among gaming service providers, thereby strengthening its position in the workstation-based gaming services in supercomputing segments. The advanced gaming cards also add value to PC manufacturers.
  • Although gaming is the key to NVIDIA’s growth, computing is becoming increasingly more visual, given the new-age tablets that are seeing tremendous demand. Software increasingly relies on a visual user interface rather than text. For example, Windows 8 requires much more GPU resources than its predecessor as it leverages improved graphics capabilities to enhance user experience.
  • The company has launched some new products and has several others in the pipeline. NVIDIA’s CEO Jen-Hsun Huang announced the launch of GeForce NOW and introduced SHIELD TV. Also notable is the 256-core Tegra X1 mobile processor.
  • NVIDIA’s alliance with Baidu for bringing in AI technology in cloud-computing services, self-driving vehicles and home assistance spaces will stoke its growth. Per the agreement, Baidu uses NVIDIA’s Volta GPUs in its cloud offerings and AI framework Paddle, through which companies and researchers can develop products and services, with real-time understanding of images, speech, text and video. The next big thing is that Baidu has selected NVIDIA's DRIVE PX 2 AI supercomputer for its self-driving car initiative known as Apollo.
  • NVIDIA’s focus on GRID platforms can increase GPU adoption in data centers, giving it an advantage against its competitors. NVIDIA GRID is a powerful GPU-based platform that supports corporate virtualized desktops in data centers, cloud gaming services and design software-as-a-service. GRID provides a visually rewarding graphics experience that a company may otherwise derive from an expensive, dedicated PC.
  • NVDA quarterly revenue growth was 49.90%, higher than the industry and sector average revenue growth (0.39% and 0.89%, respectively). See NVDA revenue growth chart.
  • NVDA profitability is improving. The YoY profit margin change was 7.26 percentage points. See NVDA profitability chart.
  • NVDA average analyst rating is Buy. See NVDA analyst rating chart.
  • NVDA cash to debt ratio is 1.43, higher than the average industry (0.33) and sector (0.17) cash to debt ratio. See NVDA cash to debt chart.

8. What are the reasons to sell NVDA? Why should I sell NVDA stock?

Let's look at the reasons to sell NVDA stock (i.e., the bear case):

  • Rapid product cycles could make it difficult for Nvidia to sustain its lead over AMD. Previously, NVIDIA and ATI made graphics chips for the PC market. Later AMD acquired ATI and combined the CPU and parallel graphics chip into a single component. AMD is now making an effort to strengthen its position in the commodity graphics segment and CPUs for console gaming systems. AMD chips have made an entry into Sony Corp.'s PS4, launched in the last holiday season. Nintendo’s Wii U and Microsoft’s Xbox One will also be going with AMD.
  • Nvidia's automotive endeavors face plenty of competition, as numerous chipmakers are targeting the market.
  • A majority of sales come from the maturing PC industry. The secular decline in the PC market has affected many chip makers, including big names like Intel and AMD. The overall PC market was mainly adversely affected by weak demand for consumer PCs.
  • Customer concentration is a major risk for NVIDIA. During fiscal 2017, about 12% of total revenue came from its biggest customer, ASUSTeK. Also, its top two customers accounted for approximately 29% of total accounts receivables.
  • NVDA stock price ($573.42) is at the 52-week high. Perhaps now is a good time to sell? See NVDA price chart.
  • NVDA Price/Book ratio is 24.52, which is high compared to its industry peers’ P/B ratios. See NVDA forward Price/Book ratio chart.
  • NVDA Price/Sales ratio is 26.11, which is high compared to its industry peers’ P/S ratios. See NVDA forward Price/Sales ratio chart.
  • NVDA average analyst price target ($406.18) is below its current price ($573.42). See NVDA price target chart.
  • NVDA Enterprise Value/Revenue multiple is 25.86, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See NVDA Enterprise Value/Revenue chart.
  • NVDA Enterprise Value/EBITDA multiple is 76.08, which is high compared to its industry peers’ Enterprise Value/EBITDA ratios. See NVDA Enterprise Value/EBITDA chart.

Key Stats

9. What are NVDA key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for NVDA:

Metrics NVDA
Price $498.55
Average Price Target / Upside $543.35 / 8.99%
Average Analyst Rating Buy
Forward Dividend Yield 0.12%
Industry Semiconductors
Sector Technology
Number of Employees 13,277
Market Cap $341.1B
Forward P/E Ratio 50.40
Price/Book Ratio 26.11
Revenue (TTM) $13.06B
YoY Quarterly Revenue Growth 49.90%
Profit Margin 25.93%

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