NVIDIA Corporation (NVDA) Gets Mixed Reviews From Analysts

Analysts at Credit Suisse, assumed coverage of NVIDIA Corporation (NASDAQ:NVDA) with Outperform recommendation, according to their opinion released on November 26. Exane BNP Paribas analysts have downgraded their rating of NVDA stock from Neutral to Underperform in a separate flash note to investors on November 20. Analysts at BMO Capital Markets are sticking to their Market Perform recommendation. However, on November 16, they lifted target price for these shares to $175 from $225. Analysts at BMO Capital Markets, made their first call for the stock with a Market Perform rating, according to a research note that dated back to November 16.

How do you judge Wall Street’s opinion of NVDA stock? You could look at price, sure. But that doesn’t tell the whole story. Short sellers are getting bullish about NVIDIA Corporation (NASDAQ:NVDA) during the most recent two-week period. Looking at the sentiment indicator for the NVDA stock we see that the short-interest ratio is at 1 while the average analyst recommendations at 2.1 suggests buying these shares. Between October 31 and November 15, the total number of shorted shares amounted to 12.39 million shares. That was 6.62% less than the total of 13.26 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for NVIDIA Corporation at the November 15th settlement plunged to 13,102,070, as compared to 16,006,532 at the October 31st report. That brought days to cover 0% down from the 1 days to cover recorded at the prior short interest data release.

By watching the trading activity of corporate insiders, it will become easier to get a sense of NVIDIA Corporation (NASDAQ:NVDA)’s prospects. The earliest insider trade took place on 10/02/2018. Puri Ajay K parted with a total of 90.83 thousand shares of company at average share price of $289.35. The total for the sales was set at $26.28 million. After this transaction, the EVP, Worldwide Field Ops account balance stood at 293.36 thousand shares. The stock lost -41.23 percent since that insider sale. On 09/24/2018, Byron Michael, Principal Accounting Officer, sold 11.26 thousand shares at a price per share of $263.94. This removed 2.97 million shares from the insider’s fortune and the stock saw a -35.58 percent retreat in value since the news became public. This transaction left 81.41 thousand shares in the Principal Accounting Officer account. On 09/20/2018, EVP & CFO Kress Colette performed a sale transaction worth $3.08 million. This sale at $266.31 each has eliminated 11.58 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -36.15 percent decrease since the transaction was reported. The insider now is left with 262.67 thousand shares remaining in the account. Byron Michael, who performs the Principal Accounting Officer job, sold 0.04 thousand shares for $12.05 thousand. The disposal occurred on 09/04/2018 was priced at $280.15 per share. The share price plunged -39.3 percent since the reporting date. Byron Michael now left with a stake of 100.77 thousand NVDA stock worth $15.83 million after the insider selling.

NVIDIA Corporation (NVDA) is expected to jump by 46.55 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $400-month high price target. This represents a whopping 154.6 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $235, which represents a return potential of 49.58 percent when compared to the closing price of the stock of $157.11 on Tuesday, December 04. The lowest price target for the stock is $120 — slightly more than -23.62 percent from NVDA’s current share price.

The shares are currently floating around the first support level of $152.93. Below this, the next support is placed in the zone of $148.74. Till the time, the NVDA stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 36.77 on daily chart, which may remain a cause for comfort. If the price breaks below $148.74 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $164.87 mark may result into a pull-back move towards $172.62 level.

NVDA shares dropped -12.93 points or -7.6 percent on Tuesday to $157.11 with a heavy trade volume of 20.17 million shares. After opening the session at $168.24, the shares went as high as $168.44 and as low as $156.5, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $92.3 billion and now has 587.34 million shares outstanding. NVIDIA Corporation (NVDA) stock has lost -26.9 percent of market value in 21 trading days.

NVDA stock has a trailing 3-year beta of 2, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $7.28 a share in the trailing twelve months. The stock’s value has fallen -18.81 percent year to date (YTD) against a decline of -15.83 percent in 12 month’s time. The company’s shares still trade -46.33 percent away from its 1-year high of $292.76 and 17.85 percent up from 52-week low of $133.31. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of NVIDIA Corporation (NVDA) are trading at a P/E ratio of 51.91 times earnings reported for the past 12 months. The industry NVDA operates in has an average P/E of 14.53. Its P/E ratio went as low as 13.79X and as high as 43.54 over the 5-year span. Further, it is sporting a 7.43 on the Price-to-Sales ratio. Compare this with the industry average P/S of 11.59. 62.5 percent is the gross profit margin for NVIDIA Corporation and operating margin sits at 36.9 percent. Along with this, the net profit margin is 37.8 percent.

NVDA will be showing off its Q4 earnings on February 13. Analysts are forecasting revenue to suffer decline of -7.2 percent to $2.7B in the next fiscal quarter, while earnings are seen soaring by nearly -21.35 percent to $1.4 per share. History has shown that shares in NVIDIA Corporation have gone up on 20 different earnings reaction days and are predicted to add 0.07 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.84 per share, worse than the $1.87, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $3.18B, worse than the $3.24B analysts expected. Earnings are estimated to increase by 79.6 percent this year, -0.15 percent next year and continue to increase by 15.56 percent annually for the next 5 years.