NVIDIA Corporation (NVDA) is poised to ascertain enduring dominance and foster immense growth through pioneering semiconductor advancements and strategic partnerships. Nevertheless, does this position NVDA because the standout stock for unparalleled growth and gains this 12 months? Let’s discover….
NVIDIA Corporation (NVDA) exemplifies the top of the market’s fervor for artificial intelligence. Renowned for its semiconductor innovations, NVDA’s chips are serving because the cornerstone of the AI landscape. Through strategic partnerships and collaborations, the corporate is fortifying its market leadership, consistently pushing the boundaries of technological advancement.
On March 7, NVDA’s partnership with HP Inc. (HPQ) to integrate NVIDIA CUDA-X™ data processing libraries with HPQ AI workstation solutions signifies a big advancement for the corporate. The collaboration is anticipated to boost NVDA’s position within the AI development landscape by providing accelerated data preparation and processing capabilities, strengthening its offerings and appealing to developers in search of efficient solutions.
Moreover, the unveiling of StarCoder2 on February 28, in collaboration with ServiceNow, Inc. (NOW) and Hugging Face, highlights NVDA’s commitment to innovation.
These unique alliances and groundbreaking advancements further validate NVDA’s competitive advantage on the technological front and open up latest areas of business expansion into the long run. As the corporate is enabling more rapid AI model development for wide-ranging applications, this further extends its competitive edge within the fast-crescent AI global marketplace that foretells sustained growth and further innovation.
NVDA shares have gained 18.8% and 92.9% over the past month and six months, closing the last trading session at $879.44.
Listed here are the financial features of NVDA that might influence its price performance within the near term:
Mixed Financials
Within the fiscal fourth quarter, which ended on January 28, 2024, NVDA’s non-GAAP revenue increased 265.3% year-over-year to $22.10 billion. Its non-GAAP net income and non-GAAP EPS got here in at $12.84 billion and $5.16 per share, up 490.6% and 486.4% from the prior 12 months’s period, respectively.
Nevertheless, as of January 28, 2024, NVDA’s total current liabilities amounted to $10.63 billion, up from $6.56 billion as of January 29, 2023.
Robust Historical Growth
Over the past three years, NVDA’s revenue and EBITDA increased at a CAGR of 54% and 81%, respectively. Its net income and EPS grew at respective CAGRs of 90.1% and 90.3% throughout the period. Furthermore, the corporate’s levered free money flow rose at a CAGR of 74.6% over the identical timeframe.
Optimistic Analyst Estimates
The consensus revenue estimate of $110.57 billion for the fiscal 12 months ending January 2025 reflects an 81.5% year-over-year increase. Similarly, the corporate’s EPS for the present 12 months is anticipated to grow 90.3% from the previous 12 months to $24.66. Furthermore, the corporate topped the consensus revenue and EPS estimates in all 4 trailing quarters.
Sound Profitability
The stock’s trailing-12-month gross profit margin and trailing-12-month EBITDA margin of 72.72% and 56.60% are 49.1% and 515.3% higher than the industry averages of 48.76% and 9.20%, respectively. As well as, the corporate’s trailing-12-month levered FCF margin of 32.61% is 261.5% higher than the 9.02% industry average.
Stretched Valuation
By way of forward non-GAAP P/E, NVDA is trading at 36.85x, 48.2% higher than the industry average of 24.87x. Its forward EV/Sales and forward EV/EBITDA of 20.10x and 31.67x are 588% and 110.7% higher than the respective industry averages of two.92x and 15.03x. Also, the stock’s forward Price/Sales of 20.23x compares with the industry average of two.93x.
POWR Rankings Exhibit Mixed Prospects
NVDA’s outlook is reflected in its POWR Rankings. The stock has an overall rating of C, which translates to Neutral in our proprietary rating system. The POWR Rankings are calculated by making an allowance for 118 various factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. NVDA showcases impressive growth prospects, consistently earning an A grade resulting from its strong historical performance. Nevertheless, its Value rating receives a less favorable D grade, mainly resulting from its lofty valuation.
By way of Stability, NVDA encounters hurdles, evident in its F grade. That is emphasized by the stock’s 24-month beta of 1.95, indicating higher volatility.
NVDA is ranked #22 out of 90 throughout the Semiconductor & Wireless Chip industry. Click here to access NVDA’s Momentum, Sentiment and Quality rankings.
Bottom Line
NVDA has the potential to ascertain itself as a pacesetter in artificial intelligence and propel long-term dominance and growth through groundbreaking semiconductor advancements. Strategic alliances that augment the corporate’s AI products are strengthening NVDA’s technology supremacy and market leadership.
Nevertheless, it might be smart to carry off until a more favorable entry time considering the stock’s current valuation and stability.
How Does NVIDIA Corporation (NVDA) Stack Up Against Its Peers?
While NVDA has an overall grade of C, equating to a Neutral rating, you could take a look at these A (Strong Buy) rated and B (Buy) rated stocks throughout the Semiconductor & Wireless Chip industry: Cirrus Logic, Inc. (CRUS), ChipMOS TECHNOLOGIES INC. (IMOS) and Everspin Technologies, Inc. (MRAM). To explore more Semiconductor & Wireless Chip stocks, click here.
What To Do Next?
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NVDA shares rose $6.30 (+0.72%) in premarket trading Friday. Yr-to-date, NVDA has gained 77.59%, versus a 8.34% rise within the benchmark S&P 500 index throughout the same period.
Concerning the Creator: Aanchal Sugandh
Aanchal’s passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor’s degree in finance and is pursuing the CFA program.
She is proficient at assessing the long-term prospects of stocks along with her fundamental evaluation skills. Her goal is to assist investors construct portfolios with sustainable returns.
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