Don't Sell Nvidia Corporation Stock Before Reading This

Shares of NVIDIA Corporation have fallen over the last few trading sessions. Is this an opportunity to buy NVDA stock on the cheap or is it time to sell? 

Dont Sell NVIDIA Corporation (NVDA) Stock Before Reading This


The uptrend in the shares of the Santa Clara, California, based NVIDIA Corporation (Nasdaq:NVDA) seems to have come to an abrupt halt. After rising 11% through the year to a peak of $119 February 9, NVDA stock has lost just over 7% in the few trading sessions since then, closing the last trading session at a price of $110.76 (Feb 22). The pain has only increased as the stock is down a further 2.66% to $107.81 in pre-market trade. The fall in the after-hours trade can be attributed to a couple of analyst reports which seem to have spooked NVIDIA investors. Romit Shah from Nomura downgraded NVDA stock by many notches, from an earlier "Buy" rating to a "Reduce" rating. Giving the Nomura analyst company was Ruben Roy from MKM partners, who initiated coverage on NVIDIA with a "Neutral" rating. With the NVIDIA stock falling off the cliff, is it time to exit the stock? Or, is it yet another opportunity to buy NVDA stock on the dip? Well, we think it's the latter. Here is why we think NVIDIA stock is poised for a rebound.

Wall Street Is Underestimating NVIDIA.

Well, in all honesty, Wall Street has underestimated the potential of the opportunities which lie ahead of NVIDIA. It's evident from the fact that the company has beaten Wall Street's EPS estimates by an average of 22% over the last 4 quarters. The beats over the last 2 quarters of FY 2017 came in at 45.6% and 19.3%, higher than a 3.1% beat in Q1 and an 8.1% beat in Q2. Well, while that's in the past, the future looks no different. According to Estimize, the Q1 FY2018 EPS consensus has climbed from $0.43 on November 7 to $0.68 currently. Well, that's a 58% rise in estimates in a little over 3 months. The revenue estimate has climbed by a more modest, but equally impressive, 23.4% over the same time frame. Is Wall Street playing catch up given the opportunities ahead of NVIDIA? Well, that appears to be the more likely case here. The current street consensus expects the company to report an EPS of $2.81 for FY 2018 (Jan 2018 ending), implying a growth of 9%. To put things in perspective NVIDIA saw its earnings rise by 37% YoY in FY 2017, with Q3 and Q4 EPS growth coming in at 88% and 182%, respectively.

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Disclosure: Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a ...

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