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Nvidia (NVDA) Stock Drops Despite Market Gains: Important Facts to Note

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Nvidia (NVDA - Free Report) closed the latest trading day at $682.23, indicating a -1.6% change from the previous session's end. This change lagged the S&P 500's 0.23% gain on the day. Elsewhere, the Dow saw an upswing of 0.37%, while the tech-heavy Nasdaq appreciated by 0.07%.

The maker of graphics chips for gaming and artificial intelligence's shares have seen an increase of 32.69% over the last month, surpassing the Computer and Technology sector's gain of 11.06% and the S&P 500's gain of 5.3%.

Market participants will be closely following the financial results of Nvidia in its upcoming release. The company plans to announce its earnings on February 21, 2024. The company is predicted to post an EPS of $4.49, indicating a 410.23% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $20.1 billion, up 232.16% from the year-ago period.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Nvidia. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

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.

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 remained stagnant. Nvidia is currently a Zacks Rank #2 (Buy).

With respect to valuation, Nvidia is currently being traded at a Forward P/E ratio of 34.55. This signifies a premium in comparison to the average Forward P/E of 25.15 for its industry.

Also, we should mention that NVDA has a PEG ratio of 2.56. 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. Semiconductor - General stocks are, on average, holding a PEG ratio of 2.64 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 235, finds itself in the bottom 7% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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