Courtesy of Benzinga.
NVIDIA Corporation (NASDAQ: NVDA), one of the hottest stocks over the last two years, reported its third-quarter earnings, which could re-start the bull versus bear debate as the stock trades at an all-time high and investors question what is an appropriate valuation moving forward.
The Analyst
Wells Fargo’s David Wong.
The Rating
Wong Maintains an Underperform rating on Nvidia’s stock with a price target raised from $75 to $87.
The Thesis
Nvidia’s earnings report showed “impressive” sales momentum, which grew 18 percent sequentially and 32 percent year-over-year, Wong said in a note. GAAP gross margin improved from 58.4 percent in the prior quarter to 59.5 percent. The company also showed revenue growth on a sequential and year-over-year basis across every segment, except OEM & IP which saw a 24 percent drop sequentially but was up 3 percent year-over-year.
Despite Nvidia’s clearly “strong product offerings” across multiple high growth markets, the stock’s valuation needs to be considered. The analyst’s fiscal 2019 EPS estimate was boosted from $3.45 to $4.34 and an appropriate price target multiple on 2019 EPS is 20x which implies an $87 price target.
Price Action
Shares of Nvidia were trading higher by more than 5 percent early Friday morning at $215.92, which is above the prior 52-week high of $212.90.
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Image Credit: By yoggy0 from Yokohama, Japan (SIGGRAPH Asia 2009) [CC BY 2.0], via Wikimedia Commons
Latest Ratings for NVDA
Date | Firm | Action | From | To |
---|---|---|---|---|
Nov 2017 | BMO Capital | Maintains | Underperform | |
Nov 2017 | Loop Capital | Maintains | Buy | |
Nov 2017 | Morgan Stanley | Maintains | Equal-Weight |
View More Analyst Ratings for NVDA
View the Latest Analyst Ratings
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