NVIDIA (NasdaqGS:NVDA) - Share price, News & Analysis

Q: What is the Fair Price of NVDA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NVDA ($187.09) is trading above our estimate of [[fair value]] ($184.49)

NVDA fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	5/6
Past Performance	6/6
Financial Health	5/6
Dividends	0/6

NVDA Stock Overview

NVIDIA Corporation provides graphics, and compute and networking solutions in the United States, Taiwan, China, and internationally.

Rewards

Earnings are forecast to grow 21.98% per year

Earnings grew by 77.9% over the past year

Risk Analysis

Significant insider selling over the past 3 months

NVIDIA Competitors

Advanced Micro Devices

NasdaqGS:AMD

US$162.8b

Broadcom

NasdaqGS:AVGO

US$225.4b

QUALCOMM

NasdaqGS:QCOM

US$169.9b

Texas Instruments

NasdaqGS:TXN

US$169.4b

Price History & Performance

Summary of all time highs, changes and price drops for NVIDIA
Historical stock prices
Current Share Price	US$187.09
52 Week High	US$346.47
52 Week Low	US$140.55
Beta	1.65
1 Month Change	23.38%
3 Month Change	5.67%
1 Year Change	-7.33%
3 Year Change	369.02%
5 Year Change	363.38%
Change since IPO	45,513.24%

Recent News & Updates

Aug 10

Nvidia: 2018 Crypto Winter Replay?

Nvidia just reported preliminary results for Q2 FY2023, warning a 19% revenue decline from the prior quarter. The decline was largely driven by the weakness of its gaming business, which could suffer a 44% contraction. These developments reminded me of the cryptocurrency winter it suffered in 2018. In this 2022 episode, I am seeing similar pressure from the crypto crash on both its stock prices and fundamentals. FYQ2 outlook and thesis Things have changed rapidly for Nvidia (NVDA) during the past few months. Let's start with a recap of its Q1 FY2023 earnings reported on May 31, 2022, only less than 3 months ago. In that report, its gaming segment was a bright spot. The segment raked in total revenue of $3.6 billion, a healthy 6% growth from the previous quarter and a whopping 31% growth YoY. The RTX 30 Series has reported the best Gaming product cycle ever. However, the business already felt weakness lurking. It provided an $8.1 billion sales guidance for Q2, representing a 2% contraction compared to Q1, largely driven by a sequential decline in its Gamin segment. Although the guidance still represents a 25% YoY growth. NVDA Q2 FY2023 ER Now, its Q2 preliminary results turned out to be much worse than the above guidance. According to the following Reuters report, the key takeaways are (slightly edited and emphases added by me): Nvidia Corp on Monday warned its second-quarter revenue would drop by 19% from the prior quarter on weakness in its gaming business… Nvidia said its gaming unit's preliminary revenue, which includes sales of high-end graphic cards for desktops and laptops, declined 44% from the previous quarter to $2.04 billion. So, its Q2 revenue would contract by 19% from the previous quarter instead of the anticipated 2%. And the game unit's 44% contraction reminds me of the cryptocurrency winter it suffered in 2018, as discussed immediately below. This leads me to the main thesis here too. I am seeing similar effects from the crypto crash on both its stock prices (through market psychologies) and fundamentals (through its exposure to crypto mining). Anatomy of the 2018 crypto winter The following charts show the anatomy of the 2018 crypto winter, with the top panel showing the Bitcoin USD (BTC-USD) prices and the bottom panel showing NVDA quarterly operating revenue YoY growth. As you can see from the top panel, Bitcoin prices collapsed from over $19k at the peak in 2018 to about $3.6k in a year (a decline of 81%, which would take a 427% rally to breakeven). And NVDA's quarterly operating revenue turned from a 40%+ expansion to a ~40% contraction in tandem. NVDA used to provide an estimate of its exposure to crypto mining in the past. For example, in 2018, NVDA estimated that its crypto-related sales were about $0.6B (about 5.7% of its $10.6B total sales). While another independent analyst (Mitch Steves at Business Insider) provided a much higher estimate of $1.95 billion of revenue related to crypto/blockchain (about 18.4% of its then overall revenues). I am guessing the true answer is somewhere in between the above two estimates. Currently, we are experiencing a similar collapse in bitcoin prices. Bitcoin prices plunged from over $65k in Nov 2021 to the current $23.8k (a 64% decline, which will take a 173% rally to break even). And now, we will need to estimate how much impact this collapse will create for NVDA this round. Seeking Alpha Will the 2018 crypto winter repeat? NVDA does not provide estimates of crypto-related sales anymore, and the range of estimates has become even wider in my view. On the one hand, its CFO Colette Kress commented (abridged and emphases added by me) during its FY Q1 earnings that it's difficult to get such an estimate, but NVDA expects a diminishing going forward. …the extent in which cryptocurrency mining contributed to Gaming demand is difficult for us to quantify with any reasonable degree of precision. The reduced pace of increase in Ethereum network hash rate likely reflects lower mining activity on GPUs. We expect a diminishing contribution going forward.

Aug 10

Bearish: Analysts Just Cut Their NVIDIA Corporation (NASDAQ:NVDA) Revenue and EPS estimates

One thing we could say about the analysts on NVIDIA Corporation ( NASDAQ:NVDA ) - they aren't optimistic, having just...

Shareholder Returns

	NVDA	US Semiconductor	US Market
7D	-1.5%	-3.3%	1.3%
1Y	-7.3%	-7.6%	-11.7%

Return vs Industry: NVDA matched the US Semiconductor industry which returned -7.6% over the past year.

Return vs Market: NVDA exceeded the US Market which returned -11.7% over the past year.

Price Volatility

Is NVDA's price volatile compared to industry and market?
NVDA volatility
NVDA Average Weekly Movement	8.4%
Semiconductor Industry Average Movement	8.9%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NVDA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: NVDA's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	22,473	Jensen Huang	https://www.nvidia.com

NVIDIA Corporation provides graphics, and compute and networking solutions in the United States, Taiwan, China, and internationally. The company’s Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building 3D designs and virtual worlds. Its Compute & Networking segment provides Data Center platforms and systems for AI, HPC, and accelerated computing; Mellanox networking and interconnect solutions; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; cryptocurrency mining processors; Jetson for robotics and other embedded platforms; and NVIDIA AI Enterprise and other software.

NVIDIA Fundamentals Summary

How do NVIDIA's earnings and revenue compare to its market cap?
NVDA fundamental statistics
Market Cap	US$468.48b
Earnings (TTM)	US$9.46b
Revenue (TTM)	US$29.54b

49.5x

P/E Ratio

15.9x

P/S Ratio

Is NVDA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NVDA income statement (TTM)
Revenue	US$29.54b
Cost of Revenue	US$10.26b
Gross Profit	US$19.28b
Other Expenses	US$9.82b
Earnings	US$9.46b

Last Reported Earnings

May 01, 2022

Next Earnings Date

Aug 24, 2022

Earnings per share (EPS)	3.78
Gross Margin	65.26%
Net Profit Margin	32.02%
Debt/Equity Ratio	41.6%

How did NVDA perform over the long term?

See historical performance and comparison

Dividends

0.08%

Current Dividend Yield

4%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NVDA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

0/6

Valuation Score 0/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NVDA?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NVDA. This is calculated by dividing NVDA's market cap by their current preferred multiple.
What is NVDA's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$468.48b

NVDA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	15.6x
Enterprise Value/EBITDA	36.7x
PEG Ratio	2.3x

Price to Earnings Ratio vs Peers

How does NVDA's PE Ratio compare to its peers?

NVDA PE Ratio vs Peers

The above table shows the PE ratio for NVDA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	27.6x
AMD Advanced Micro Devices	52x	27.7%	US$162.8b
AVGO Broadcom	26.1x	9.5%	US$225.4b
QCOM QUALCOMM	13.2x	0.3%	US$169.9b
TXN Texas Instruments	19.8x	-4.4%	US$169.4b
NVDA NVIDIA	49.5x	22.0%	US$468.5b

Price-To-Earnings vs Peers: NVDA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the peer average (27.8x).

Price to Earnings Ratio vs Industry

How does NVDA's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: NVDA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the US Semiconductor industry average (20.5x)

Price to Earnings Ratio vs Fair Ratio

What is NVDA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NVDA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	49.5x
Fair PE Ratio	49.3x

Price-To-Earnings vs Fair Ratio: NVDA is expensive based on its Price-To-Earnings Ratio (49.5x) compared to the estimated Fair Price-To-Earnings Ratio (49.3x).

Share Price vs Fair Value

What is the Fair Price of NVDA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NVDA ($187.09) is trading above our estimate of fair value ($184.49)

Significantly Below Fair Value: NVDA is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is NVIDIA forecast to perform in the next 1 to 3 years based on estimates from 42 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

22.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NVDA's forecast earnings growth (22% per year) is above the savings rate (1.9%).

Earnings vs Market: NVDA's earnings (22% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: NVDA's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NVDA's revenue (14.4% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: NVDA's revenue (14.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NVDA's Return on Equity is forecast to be very high in 3 years time (48.3%).

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Past Performance

How has NVIDIA performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

25.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NVDA has high quality earnings.

Growing Profit Margin: NVDA's current net profit margins (32%) are higher than last year (27.6%).

Past Earnings Growth Analysis

Earnings Trend: NVDA's earnings have grown significantly by 25.8% per year over the past 5 years.

Accelerating Growth: NVDA's earnings growth over the past year (77.9%) exceeds its 5-year average (25.8% per year).

Earnings vs Industry: NVDA earnings growth over the past year (77.9%) exceeded the Semiconductor industry 52.7%.

Return on Equity

High ROE: NVDA's Return on Equity (35.9%) is considered high.

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Financial Health

How is NVIDIA's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NVDA's short term assets ($29.6B) exceed its short term liabilities ($5.6B).

Long Term Liabilities: NVDA's short term assets ($29.6B) exceed its long term liabilities ($13.3B).

Debt to Equity History and Analysis

Debt Level: NVDA has more cash than its total debt.

Reducing Debt: NVDA's debt to equity ratio has increased from 35.9% to 41.6% over the past 5 years.

Debt Coverage: NVDA's debt is well covered by operating cash flow (81.9%).

Interest Coverage: NVDA's interest payments on its debt are well covered by EBIT (53.8x coverage).

Balance Sheet

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Dividend

What is NVIDIA current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.085%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NVDA's dividend (0.085%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: NVDA's dividend (0.085%) is low compared to the top 25% of dividend payers in the US market (4%).

Stability and Growth of Payments

Stable Dividend: NVDA is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: NVDA is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: NVDA is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: NVDA is not paying a notable dividend for the US market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

13.6yrs

Average management tenure

CEO

Jensen Huang (59 yo)

29.33yrs

Tenure

US$23,737,661

Compensation

Mr. Jen-Hsun Huang, also known as Jensen, Co-founded NVIDIA Ltd. in 1993 and has been its Chief Executive Officer and President since 1993. Mr. Huang co-founded NVIDIA Corporation in April 1993 and has bee...

CEO Compensation Analysis

Compensation vs Market: Jensen's total compensation ($USD23.74M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Jensen's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NVDA's management team is seasoned and experienced (13.6 years average tenure).

Board Members

Experienced Board: NVDA's board of directors are seasoned and experienced ( 12.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: NVDA insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/05/01
Annual Earnings	2022/01/30