6 Nov

NVIDIA Stock Prices and Valuation ahead of Q3 Earnings

WRITTEN BY Ambrish Shah

Nvidia (NVDA) is scheduled to report its results for the third quarter of fiscal 2020 on November 14, after the market bell. The third quarter ended on October 27. Wall Street expects Nvidia to post revenues of $2.9 billion in the third quarter—down 8.2% year-over-year. The company will likely report non-core EPS of $1.58—down 14.1%.

Today, Nvidia stock was down 1.8% at $205.85 as of 11:57 AM ET. And yesterday, the stock fell 0.42% and closed at $209.61, with a market capitalization of $127.7 billion. The stock is trading 3.6% below its 52-week high of $217.41 and 68.4% above its 52-week low of $124.46. It has also returned 57% year-to-date. Comparatively, the S&P 500 Index has gained about 22% year-to-date.

Analysts’ recommendations and target prices

Let’s take a look at Nvidia’s consolidated ratings. The company received a “buy” rating from 27 analysts while nine analysts surveyed by Thomson Reuters have a “hold” rating. Meanwhile, three analysts recommend a “sell.”

The stock’s mean price target of $195.64 implies a 6.7% downside from the last closing price of $209.61. The median target price was $195 on the same day.

Craig-Hallum analyst Richard Shannon kept a “hold” rating on Nvidia stock and increased his target price to $200 from $165. RBC analyst Mitch Steves increased his target price from $217 to $251, and he reiterated an “outperform” rating.

Nvidia stock valuation

Nvidia stock is currently trading at 38.82x its fiscal 2020 estimated EPS of $5.40. It’s also trading at 29.38x its fiscal 2021 estimated EPS of $7.13. Analysts expect the semiconductor company’s adjusted EPS to fall 18.7% year-over-year in fiscal 2020 but then rise an impressive 32% in fiscal 2021. They also expect Nvidia’s earnings to rise at a CAGR of 12.5% over the next five years. Nvidia’s revenues are likely to fall 8.0% year-over-year in fiscal 2020 but then rise 20.1% in fiscal 2021.

On November 5, Nvidia stock closed near its upper Bollinger Band level of $213.35, which implies that the stock is overbought. The company’s middle Bollinger Band level is $196.81, and its lower Bollinger Band level is $180.27.

Micron, Intel, and Advanced Micro Devices also rose year-to-date. These chip stocks gained 53.4%, 22.6%, and 95.8%, respectively, year-to-date.

Check out Was Jim Cramer Right to Back Nvidia over Microchip? and Nvidia Stock Could Be Poised for a Breakout to learn more.

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