ETFs To Watch Ahead Of Nvidia's Fiscal Q3 Earnings

Graphics chipmaker NVIDIA (NVDA - Free Report) is set to release third-quarter fiscal 2020 results on Nov 14 after market close. As it has been one of the hottest stocks in the semiconductor space, let’s take a look at its fundamentals ahead of earnings release.

NVIDIA has been on a stellar run over the past three months, locking in gains of about 39.6%, outperforming the industry average gain of 22.6% by a wide margin. This trend is likely to continue given the positive earnings estimate revisions, which are generally a precursor to an earnings beat though earnings surprise is difficult to predict this time.

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Inside Our Methodology

Nvidia has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The videogame-gear specialist saw positive earnings estimate revision of four cents over the past 90 days for the third quarter of fiscal 2020. Additionally, the company’s earnings surprise history is solid with positive earnings surprise of 4.54% on average over the past four quarters. However, the company is expected to post earnings decline of 14.7% and revenue decline of 8.8% in Q3. Additionally, the stock belongs to a bottom-ranked Zacks industry (placed at the bottom 35% of 250+ industries) with an unimpressive VGM Score of D (see: all the Technology ETFs here).

According to the analysts polled by Zacks, Nvidia has an average target price of $200.64 with around 68% giving a Strong Buy or a Buy rating ahead of the company’s earnings.

What to Watch?

Nvidia has received target price hikes from two analysts — UBS and Deutsche Bank — ahead of earnings. While the company is penetrating newer growth areas such as data centers, AI and self-driving cars, its key business remains selling chips, which enhance video game graphics. Investors are looking for year-over-year Nvidia’s sales trend improvements, especially in its data-center business.

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