Graphics chip maker Nvidia is set to announce its earnings results after the market closes on Wednesday, May 25th.
As Nvidia gears up for its quarterly earnings next week, the stock sits nearly 50% off an all-time high reached late last year, with a 40% drop happening so far this year alone. The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
Prior Period Results
Nvidia last issued its earnings results on Wednesday, February 16th. The computer hardware maker reported $1.14 EPS for the quarter, beating analysts’ consensus estimates of $1.01 by $0.13. NVIDIA had a return on equity of 42.99% and a net margin of 36.24%. The business had revenue of $7.64 billion during the quarter, compared to analyst estimates of $7.43 billion. During the same period in the previous year, the company posted $0.64 EPS. The firm’s revenue was up 52.8% compared to the same quarter last year. On average, analysts expect NVIDIA to post $5 EPS for the current fiscal year and $5 EPS for the next fiscal year.
Factors To Watch For
Though Nvidia's datacenter growth may once again be a bright spot in the company'sfiscal 1Q 2023 results, Its automotive growth expectations would be a focus for investorsgiven Qualcomm's strong gains in that segment. Datacenter revenue could exceed its core Gamingsegment sales for the first time amid strong demand from hyperscale and enterprise companiesinvesting in AI and high-performance computing.
Nvidia's datacenter will likely surpass consensus growth expectations driven by higher averageselling prices (ASPs). Supply-chain issues so far haven't hurt its unit shipments though higher foundrycosts could limit gross margin to about 67% in the quarter.
As always, investors should focus on the two largest platforms, gaming and data center. Last quarter, these two businesses combined accounted for 87.4% of the company's overall revenue.
On the earnings call, management is certain to discuss progress with its Omniverse, which is Nvidia's platform for enabling companies to build their metaverses. The company launched Omniverse last year and has been regularly rolling out additional features. This platform has the potential to significantly boost professional visualization revenue.
The market looks ahead, so management's guidance, relative to Wall Street's expectations, will likely be a major factor in the market's reaction to Nvidia's upcoming report.
Analyst Recommendations
A number of equities analysts have issued reports on NVDA shares. Barclays cut their price target on NVIDIA from $350.00 to $295.00 and set an “overweight” rating for the company in a research note on Monday, April 25th. Mizuho lifted their price target on NVIDIA from $335.00 to $345.00 and gave the company a “buy” rating in a research note on Thursday, February 17th. Truist Financial cut their price target on NVIDIA from $347.00 to $298.00 in a research note on Friday, April 8th. Cowen reiterated an “outperform” rating and set a $350.00 price target on shares of NVIDIA in a research note on Tuesday, March 15th. Finally, Citigroup upgraded NVIDIA from a “neutral” rating to a “buy” rating and set a $280.00 price target for the company in a research note on Wednesday, April 13th. They noted that the move was a valuation call. Eight research analysts have rated the stock with a hold rating, twenty-five have issued a buy rating and one has given a strong buy rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and an average price target of $324.82.
Earnings Preview
For the Nvidia first quarter FY23, the Bloomberg Consensus Estimate for revenues is pegged at $8.102 billion, adjusted net profit is pegged at $3.295 billion, adjusted EPS is pegged at $1.299.
Comments